iA


Billable showers

by Jay Shepherd. Average Reading Time: about 2 minutes.

Shower head

Vanessa is a senior litigation associate at a large Northeast law firm. She is a hard worker, a good writer, and a very intelligent young woman. She bills at $575 an hour. She carefully tracks her time.

One afternoon, she is working on a summary-judgment brief. She is focused on a tricky jurisdictional issue that is central to the case. She has just come up with what she feels is a clever approach based on a casenote she just read. She goes onto Lexis and downloads the case. She prints it and reads it carefully. It seems helpful. She then looks up similar cases, finds 24 of them, and reads or skims all of them. She takes careful notes, and she starts outlining this section of the brief. Then, to her dismay, she finds a more-recent case that changes the law in her jurisdiction. This shuts the door to her clever argument. She puts her research and her notes into a file folder, and she deletes the outline she had been working on.

She checks her computer clock, pulls out her timesheet, and enters the 3.6 hours that she spent on this work, along with a careful description of the tasks she performed.

The next morning, well before sunrise, she’s taking a shower. After lathering, rinsing, and repeating, she suddenly gets a brain flash on how to solve a different issue in the case. Collateral estoppel! Of course! As the hot water splashes over her, she realizes that she’s just come up with a killer argument for her brief. She’ll do the research when she gets into the office, but she’s certain it will work.

While she’s dressing, she grabs her Blackberry and makes a note of the time she just spent working on her case. She puts down 0.3 (including the rinsing and the repeating), because she spent at least 18 minutes analyzing the issue.

• • •

The brainstorm in the shower proved to be the winning argument in the summary-judgment brief, saving the client hundreds of thousands of dollars by avoiding a trial. The 0.3 hours cost it $172.50, assuming Vanessa did not expense her seaweed conditioner.

The time she spent doing jurisdictional research for her brief proved to be wasted effort. None of that work benefited her client. The 3.6 hours cost her client $2,070 (plus the marked-up cost of the online legal research).

To all you lawyers who bill by the hour: please explain to me why the online-research work was worth 12 times more than the brainstorm in the shower.

If you are paying attention to the value the client receives, you wouldn’t bill by the hour.

You’d bill by the shower.

13 comments on ‘Billable showers’

  1. Tom Caffrey says:

    Jay, I always thought ‘Knowledge is Power’ but (I guess) what you are really saying is ‘Knowledge is Shower?’

  2. [...] Here’s a link to an article by attorney Jay Shepherd, a short but great 2 minute read describing the difference between charging for your time (activity) vs charging for your knowledge. http://prefixllc.com/billable-showers/ [...]

  3. CAH says:

    Vanessa wouldn’t have had the extensive understanding of the issue that formed the basis for her light-bulb moment if she hadn’t read those cases. She might have come up with the “aha” idea first, but she still would have had to research it. No client is going to let a lawyer “wing it” based on 0.3 hours of analysis.

  4. Therese says:

    She billed $172.50 for coming up with the collateral estoppel idea, but how long did it take her after she got to the office to do the research, confirm that she was right, find authority to cite in the summary judgment brief, and then write the argument? (Unfortunately, judges still require good old citations instead of the certitude of a senior associate that an argument is right in order to rule in a party’s favor.) My guess is that she ultimately billed much more than $172.50 to the project, start to finish. If you’re going to compare apples to apples, you have to compare the end cost of the entire collateral estoppel project to the end cost of the jurisdictional research.

    One could argue that the jurisidctional research ultimately turned out to be a waste of time, but that’s when the law firm has to look at whether the research was really necessary and whether it should be charged to the client (we often write off time before it’s charged). Since it turned out to be a loser only because of a recent case law development (and not because of long standing precedent that any seasoned litigator should have known), I would argue that the research was probably necessary. To argue otherwise creates a very slippery slope. Do lawyers not charge for time spent reviewing documents that ultimately are not introduced into evidence? Do they refund time billed for a deposition where the deponent can’t recall anything useful? In any kind of complex litigation, a lawyer will do tasks that ultimately don’t secure a victory, yet clients are expected to pay for those tasks. If clients don’t want to pay for that, they can’t complain when, for example, a “smoking gun” document is missed because the lawyer assumed it would not be relevant and decided not to look at it (or charge for reviewing it).

  5. David Carlson says:

    I disagree with a fundamental premise of your argument – that Vanessa would have had the inspiration without the previous “wasted” effort. Even though she flashed on a different issue in the case, I would bet that all the time she spent reviewing the case law, crafting an argument, and applying it to her facts gave her a more intimate knowledge of her case and gave her subconscious the ingredients it needed to come up with her solution.

  6. Frank L says:

    No!!! I disagree with the premise that the 3.6 hours was wasted. It was part of the process that lead her to find the right solution. That is like saying it is only the last 50 feet of a marathon that wins the race. Your attempt to discount the value of such work falls flat.

  7. Judy Routledge says:

    The client isn’t paying for just value; he or she is paying for analysis of complex legal problems which take time, and is process-driven. One may have to go down many blind alleys to get to the light. While the light is the goal, it cannot be seem without trawling through the alleys.

  8. R. Thomas says:

    My father, an attorney for 45+ years, described such situations with his “plumber” story. A homeowner with a serious plumbing problem brings in a plumber, who studies the pipe in question for a few minutes and then taps it with a hammer, which cures the problem. He presents his bill for $100.00. The client asks “Why so much? All you did was tap on the pipe with your hammer.” His answer: “Tapping on the pipe was only worth $10.00. The other $90.00 was for knowing where to tap!”

  9. The process is what led the lawyer to the final solution. Analyzing the problem and testing several hypothesis is part of the process to arrive at the solution. Sometimes the solution is not arrived at by the path chosen. The client got his money’s worth.

  10. James S. says:

    Whether the 3.6 (or other time spent) was wasted, and whether it led to the breakthrough is not the point. The point is that time spent has no relationship to the value created for the client. The client determines the value, which is not a function of attorney time spent. The client in this case got much more than its money’s worth. And the firm charged for the time, but gave away nearly all of the value.

  11. Tom Bowden says:

    To those who have convinced themselves that the shower inspiration was somehow worthless without the preceding wasted time, or that the insight required more research therefore the point is invalid, let me explain something. During an interlude from practice, I had the opportunity to hire some high priced attorneys at big firms. I will tell you that for every time worthless effort precedes a flash of insight, there is an example where the worthless effort precedes nothing at all, or worse, the insight comes from the client (in this case it was me). I took no solace in knowing that a high priced AMLAW 100 law firm junior partner struggled with my problem for weeks with no solution before I came up with the answer, whether out of inspiration, desperation or utter frustration. It doesn’t have to be that way, and there is no causal connection between the two that can justify charging for failure just because it precedes success. Jay could easily modify his example to prove the point. What if the wasted research was for a different client, and the insight came to Vanessa in the same way, following the wasted research. Should the second client pay for the first client’s wasted research? Sould the first client get the answer for free?

  12. Russ Wood says:

    Clients pay for knowledge and experience, both of which are cumulative. The fee for the presumed “wasted” jurisdictional research is legitimate because it has enhanced V’s knowledge and experience of the client’s particular matter. That the EUREKA moment came to her over the course of less than a few minutes is irrelevant.

  13. Barry Berger says:

    I have just recently considered Value Pricing after attending a very inspirational Seminar in Melbourne with Ron Baker. My Partner and I are seriously considering implementing it for our boutique firm.
    I have also read the above responses to the Value in the Shower blog and am confused. I think that many of the responses miss the point about value. They continue to justify the time taken, rather than the value of the result. The more important question for me at this embryonic time is how to price such a result BEFORE the fact. It seems to me that the responses just shows how hard it is for professionals to move away from pricing based on time.

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