Over the years, I have talked to numerous attorneys, both partners and associates, about how they actually bill their time. I’ve also observed the actual practices of these attorneys. Today, I’m going to share with you techniques that other attorneys have employed to increase their billable time. In particular, we will discuss positive vs. negative accrual methods of calculating billable hours.
As an entry-level associate, you probably bill your time using a positive accrual method. By that, I mean that you start the timer every time you sit down to work for a block of time. Throughout the day, you accumulate blocks of time based on the work you do, and when you add it up, that total becomes your billable hours for the day. Let’s say you were physically in the office for 13 hours. Throughout the day, you worked on a number of different cases. 0.3 hours for a client call, 1.2 hours for a telephonic meet and confer with opposing counsel, 3.4 hours revising a legal brief, et cetera. Yet, somehow at the end of the day, you add up all the 0.1s and the 0.2s and they don’t amount to much. Perhaps, at the end of your 13 hour day, your billables only add up to 7.8 hours. It doesn’t seem to reflect how hard you actually worked. Where did all the lost time go?
Hence, the negative accrual method. This is a system of calculating the total number of hours you are actually in the office. If you get in to work at 9 a.m. and leave at 10 p.m., your total hours is 13. Now, instead of calculating the blocks of time you actually worked, instead you calculate the blocks of time that you did not work. So you subtract an hour for lunch, half an hour for doing personal e-mail, another 0.3 hours for talking to your significant other or spouse on the phone. That’s 1.8 hours total. 13 minus 1.8 is 11.2. All of a sudden, your billables have just increased significantly!
Theoretically, the positive and negative accrual methods should result in the same billable total. In practice, they never do. The reason for this is that time gets “lost” every time you transition from one matter to another. The reality is that an attorney is rarely working on one case for the whole day. Sometimes that happens, and it makes it really easy to bill for the day. But when you are working on a brief for one client, and another client calls, and then a partner steps into your office to talk about a third case, and then you take a call from co-counsel for a fourth case… well, you see how things can get complex pretty quickly. Every time you transition from one case to another, it’s difficult to keep track of that time.
The other reason that the positive and negative accrual methods result in different totals has to do with a lot of “tick tack” time that is not calculated in the positive accrual method but is “absorbed” by the negative accrual method. Bathroom time, chatting with your secretary for 3 minutes about her kid, talking with another associate for 5 minutes about the game last night–all this time adds up quickly. Technically, if you are a strict follower of the positive accrual method, your stopwatch is stopped each time one of these tick tack events occurs. But when you apply the negative accrual method, some or all of these tiny tick tacks simply aren’t calculated or subtracted from the overall day.
Which method is more accurate? more ethical? Is the negative accrual method already “built in” to the billable rates? Is it odd that there aren’t more specific rules governing how attorneys bill their time, even though the whole business is structured around, and dependant upon, the billable hour?
When I first started practicing law, I ran into this same issue. Spent 8 hours in the office, but found myself only billing 4-5 hours. Partner told me I wasn’t billing “efficiently.” Odd word choice. Apparently, the more “efficient” way to bill is to use what you call the negative accrual method. So I started doing that and my billables went way up.
Lawyer06 – Thanks for sharing. It would be interesting to conduct a poll to see how many associates use the positive accrual method, the negative accrual method, or a combination of the two.
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Hi Matthew:This is my first visit to your blog. I am very intrigued as a 14 year lwyaer starting her solo practice about an alternative to billable hours. Perhaps it is because I am new to your blog, but what I find missing from your presentation slides is the alternative. If not billable hours, then what and how? How does a new solo practitioner determine what to charge for legal work?I poked around the blog a bit but don’t see where to find your thoughts on this. Thanks in advance.
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