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Are non-billable hours really non-billable?

I recently read a brilliant blog piece by someone I enjoy following, Jordan Furlong, who specialises in new ideas and strategies for transforming the legal world.

This piece I read from Jordan was all about the non-billable hour: How it is not so much an hour of wasted time because the work carried out in the hour isn’t billable, but the work is simply not billable yet.

He summarised non-billable work such as business development, marketing, administration, communication, training, management, leadership, and pro bono work.

Jordan’s point is that every one of these things is what makes billable work possible, and I agree.

How will you get a junior to hit their billing targets if they are not being trained and supported to improve their ability and efficiency?

How will you have clients to bill if you don’t initially carry out the business development to create them as clients?

How will you ensure that team members can handle much larger volumes of work so they increase your profits while reducing workload if you don’t manage them effectively?

Exactly. Without this so-called ‘non-billable’ work, you will not go anywhere because you won’t incrementally increase the number of hours your firm as a whole can bill per hour.

Jordan finished the article by saying.

“If you want to strengthen your firm, to raise morale and reduce attrition and incentivize the behaviours that make law firms great, change your terminology from “non-billable hours” to “investment time.” Tell your people that their work should be geared towards bringing in revenue now or bringing in revenue later, and both these categories of work are valuable. The atmosphere change in your firm will be palpable.”

I love his distinction of “investment time”, and to simplify this even further, I like categorising all work across a firm as either important or urgent.

Stephen Covey, author of The 7 Habits of Highly Effective People, took Eisenhower’s study to create the now-renowned Eisenhower Matrix (pictured).

Knowing whether what you need to do is urgent or important is crucial to building a successful firm.

In my conversations with law firm owners, I often see them lost in doing what is urgent, which prevents them from doing more of what is important.

The impact of this is that they build a firm where they need to continuously react urgently to circumstances and never have the time to implement solutions to free themselves of this trap. Their role continues and exhausts them until the day they can no longer work.

As the Eisenhower matrix shows, some tasks are urgent and important and must be handled first.

I’ve seen these are:

  • Completing preparation before a court hearing.
  • Do billable work at short notice for long-lasting clients to avoid losing their work.
  • Re-doing pieces of work to save a client relationship and avoid damaging the firm’s reputation.

As a result of having to focus on a lot of this kind of work, your firm doesn’t particularly grow or become more profitable.

Though they may not need immediate attention, ‘important’ tasks that are not urgent are usually vital to building a law firm you love being the owner of, one where you get to work the hours you choose while enjoying truly satisfying levels of profit.

These actions are often such as:

  • Distinguishing what work roles aren’t being covered well and then recruiting exactly the right candidate.
  • Holding recruiters to account for bringing you the right next candidate.
  • Providing one-on-one time to elevate your associate’s skills.
  • Holding one-on-one calls to delegate workload away and co-review associate's work.
  • Checking that everyone is recording their billable time effectively and that it's being billed for.

Steve Covey suggests that you determine whether what you need to do is either:

1) Important and urgent.

2) Important but not urgent

3) Not important but urgent.

4) Not urgent and not important.

Then to organise each of your tasks into the four quadrants of the Eisenhower Matrix.

I say don’t bother.

As a law firm owner, you are often too busy for this, so treat all work as simply either important or urgent.

Urgent work needs to be done first to keep your firm running, but doing so usually only maintains what you have already and doesn't build anything new.

Important work feels less urgent but is the work that has you build a better firm to look forward to tomorrow.

The art is to first schedule what is important, what will actively cause you to build a great firm, then fight like mad to protect that time, and do what you’ve committed.

Then, use the time you have left in your schedule to handle everything that is urgent.

Obviously, urgent work will still take priority. However, if you practice this daily, completing what is urgent and one to three important tasks per day, you’ll gain great momentum.

As a result, you’ll get better and better at building a firm that doesn’t keep you forever having to do what is urgent but a firm that gives you the time to do even more of the important work. As such, you'll continue building a firm that is ever less demanding on you while being ever more profitable.

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Dan Warburton

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Delegate Now to Supercharge Your Profits

Bill fewer hours but make bigger profits
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The Law Firm Owners Podcast episode Generative AI Versus Culture with Jordan Furlong
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