Every so often, I've been asked if it's all right to bill for time thinking about a client's problem -- not reading, not writing, not meeting, just thinking. This was a frequent subject of debate when I was a young lawyer at a big firm.
Does it matter where you're thinking? I sometimes go to Central Park with a little note pad and think. Though I'm in the park, I'm free of the stimulus and distraction of home and office, and the park, while stimulating, is less distracting.
I think about a client's problem. I may make a note or two if thoughts occur, or I just remember them. This has been productive. But sometimes it's not productive.
And what if I'm on the bus going to work? I find being in a public place is not unlike isolation. Anonymous in the city. Zoning out. I'm good at that.
So then the slippery slope takes me into thinking about whether it's okay to bill for thinking in the shower.
If thinking at my desk is okay (is it?)-- or thinking while typing and letting the keyboard lead me to an answer (that does work, thinking with your fingers, I'm doing it right now) -- why not thinking in the park with a note pad?
I have a view but I'll hold off so as not to influence your thinking.
This is a great question and one I've considered as well, usually right after spending ten minutes thinking about a client's matter on the train.
I think that, at least in theory, this should be appropriate. After all, if I am sitting on a park bench thinking about a client's problem instead of reading a good book or doing some other personal task, that's time I've spent on a client matter. Location shouldn't matter. Conversely, if I happen to be sitting at my desk and daydreaming or talking to a friend on my office phone, I shouldn't bill for that time, because I wasn't doing any work for the client. In this day and age, location should not be the proper indicator of what should count as billable time.
The reason that I say "at least in theory" is that it can be very easy to overestimate the amount of time truly dedicated to a client's task in these informal settings. Unless one is very diligent about checking a watch (perhaps starting the timer on a smartphone when the "thinking" begins and turning it off when the "thinking" ends), I suspect that many of us will unintentionally overestimate the amount of time spent "thinking." So there is a real risk here of overbilling. I guess where I come out is that this is ok, but lawyers should be diligent about marking off the time spent on the client's matter.
Of course, this whole conversation reflects one of the many, many problems with the billable hour. Although there has been a lot of painful upheaval in the legal industry the last few years, one of the salutary developments is that an increasing number of firms are moving away from the billable hour or are at least experimenting with alternative billing arrangements that effectively eliminate these kinds of concerns. Perhaps we'll look back at this post in 20 years and view it as quaint?
Posted by: Andrew Perlman | March 11, 2013 at 10:22 PM
Whatever this conversation reflects it does not reflect "one of the many, many problems with the billable hour." First, there are no more problems with the bilable hour than there are any other forms of lawyer compensation. Second, however many problems there may be with the billable hour or other compensation forms, there are not "many, many."
Posted by: Doug Richmond | March 12, 2013 at 07:22 AM
Billing, and more particularly hourly billing, is one of my favorite topics of the semester in PR. I continue the push- is it ok to bill your client for practicing your opening statement? is it ok to bill for practicing your opening statment in the shower? if so, then is it ok to bill for thinking about the case in the shower?
how about waking up in the middle of the night having had a dream about the case? or waking with a brilliant idea about case strategy?
all make for interesting discussions about drawing the line...
Posted by: Gary Miller | March 12, 2013 at 09:03 AM
I agree with you, Doug, that every system has its flaws. But if there are "no more problems with the billable hour than any other forms of lawyer compensation," what is the cause of the trend away from the billable hour? Or is it your view that law firms are not actually moving away from it and that clients are not increasingly requesting different arrangements?
Posted by: Andrew Perlman | March 12, 2013 at 09:17 AM
The issue is universal. I remember the (apocryphal?) story of the Swiss lawyer whose detailed fee statement had the rhyming entry 'in der Nacht aufgewacht, nachgedacht' ('woke during the night and thought about the matter').
And that's from half a century ago!
Posted by: Peter Lederer | March 12, 2013 at 10:24 AM
My test is: Would I feel entirely comfortable if the time charge appeared in an affidavit to a court to approve counsel fees? One could also ask whether he or she would feel entirely comfortable defending the charge to the client. Or if one were the client.
So the time spent going for a walk in the park to think through a problem -- and it works wonders for me, especially if it's Central Park (Thank you Mr. Olmstead); the beach also works -- is entirely defensible. I'm carving out the time with that objective. If we assume that thinking is compensable, and I certainly think it is, then it might not matter where it occurs.
But there are limits. My park defense envisions that I'm taking the walk for that very reason. Perhaps it will help unblock me. I would not charge for thinking about a problem on the bus or in the shower (or sleeping). I'm doing something else. Thinking is incidental to the something else.
Sure, i may have a great idea on the bus, one that just comes to me, but that's insufficient.
Of course, this requires much judgment.
Frankly, I would not hire a lawyer who charged for thinking in the shower no matter what the proof of the relationship between water therapy and creativity.
Posted by: Stephen Gillers | March 12, 2013 at 05:42 PM
Further thoughts:
This can get pretty interesting. I hope that thinking about a problem is a compensable activity. But it's funny that our time sheets rarely if ever say "thinking." Rather we describe a visible activity -- read cases, draft, review memo, conference call, etc. Yet thinking forms a part of all of these activities, of course. And indeed, one would expect to think before drafting, before the conference call, after having read a case. It cannot be that compensable time requires "thinking plus" but not "thinking" only.
However, how would a judge react to a request for counsel fees where the task is described as "thinking," or, more provocative, "thinking in the park?" If the judge practiced law, one would hope she would react well. For surely it makes no sense that if I go to the park with my partner and we discuss the case, we can both charge for our time. But if I go alone and "discuss" it with myself, there can be no charge -- especially so because were I to take my partner, it may be merely to listen an comment every so often, while I proceed to think out loud.
We don't want a profession where the rule is that lawyers cannot get paid for thinking unless they are doing something else at the same time. We want thinking to be prized, perhaps above all. But that requires us to be careful when we charge for just thinking, as I suggested above.
Posted by: Stephen Gillers | March 12, 2013 at 06:53 PM
Of course this illustrates a problem unique to the billable hour - that it reduces legal services to the time spent, rather than the value delivered.
Or to put it another way: the notion that all time spent on a legal matter is equally valuable to the person paying the bill. It should be obvious that this is not the case, but the billable hour forecloses such a possibility.
Posted by: Joshuamking | March 13, 2013 at 01:22 AM
First, while clients to some extent seek alternative billing arrangements, the billable hour remains the principal form of compensation for lawyers. There has got to be a reason for that, and at least one of the reasons is many clients' comfort with the billable hour. Second, and consistent with the first point, clients are not seeking alternative billing arrangements to the extent many people might have predicted. Third, there are some matters that lend themselves well to alternative billing arrangements (whether that is flat fees or contingent fees or something else), and clients and lawyers alike are wise to explore those opportunities. Many lawyers and many clients have alternative billing arrangements for some types of work and adhere to hourly billing for others. Fourth, good lawyers who bill by the hour work as efficiently as they can because they know that is best for their clients and best for them in the long run because it leads to satisfied clients. There are simply some matters that are best billed hourly; "time spent" and "value delivered" are not necessarily disconnected, nor are they necessarily opposites.
Posted by: Doug Richmond | March 15, 2013 at 08:46 AM
I agree with Doug that the billable hour is the best way to bill in many cases. Some assignments are simply too amorphous to permit prediction. It's fine to talk about value billing. Contingent fees are the prime example. But some work cannot be value billed. Not fairly.
Say a client, a new company, wants to be able to call from time to time for legal advice. At the inception, no one knows how often that will be or how complicated the questions. It's too new. Maybe after a year or so, prediction is feasible and the billing arrangement can settle on a fixed fee for phone advice per quarter. But even then a lawyer should be able to say -- and would be wise to say -- that if the scope of the work, though still phone advice, changes greatly, thereby requiring a lot more time than either client or lawyer anticipated, the arrangement needs to be revisited. Otherwise, a lawyer may not be willing to lock herself in.
So at the inception, when prediction is hardest, time billing makes great sense.
Or take this example: A client wants a defined, but custom, service, not a routine service whose time demand can be easily identified. It wants to know the law on subject X in six states and one Canadian province. Subject X is a bit opaque. It's not an ALR note.
If the lawyer gives a fixed fee before even beginning, she is going to err in her favor. It may be best for the client not to have a fixed fee but an hourly fee. Or the lawyer may cap the total but then want a floor (minimum) as well. Still, the driver is time.
Posted by: Stephen Gillers | March 16, 2013 at 09:58 AM
This comes up every year in my PR class. I agree that location is not the deciding factor and that thinking about a case can be legitimate billable time when hourly billing is involved (frequently billed as "analyzing" or "strategizing" or "assessing").
I suggest three guidelines for my students to think about. First, is thinking about your client's matter your primary objective during the relevant period of time? If you're in the shower, I'd say that getting clean is your primary objective and thinking about the client's matter is secondary and shouldn't be billed. But, if you're sitting in a park with a notepad with a goal of thinking through your strategy on a case, then it sounds like working on a client matter is your primary objective. Second, image that your client could watch what you are doing on a webcam. How do you think they would feel about paying you $200 or whatever an hour for what they see? (Similar to the idea of being comfortable explaining what you did to a judge in an affidavit). Third, turn the tables and imagine that you or a close family member is paying $200 an hour of hard earned money for this lawyer's time. How would you feel about paying it?
Posted by: Laurel Rigertas | March 19, 2013 at 02:57 PM
Laurel's criteria are the ones I'd use and do use. I still wonder, though, what a judge would do if a request for counsel feels (say in a class action settlement or fee shifting case) identified time for "thinking." I believe that if the thinking satisfied Laurel's criteria, it should be compensated. But I suppose, as she says, that lawyers elide that issue by calling thinking something else. Yet, thinking is among the most productive tasks we can perform.
Posted by: Stephen Gillers | March 21, 2013 at 12:26 PM
One of the problems is that clients don't "feel" like paying lawyer fees under any circumstances. Yet "thinking" about a case, working through issues, and developing strateies for client success are important stages of the process and should be compensated, regardless of how the client "feels".
I agree that if you put yourself in the place of the client, you would not appreciate being billed for shower time having great thoughts or practicing opening argument, but these are legitimate parts of the process.
Litigators, as an example, have a tough time turning off the brain and telling themselves "I will not think about the case in the shower, I will not think about the case in the shower..." Is their legitimate work on the case, albeit in the chower, free to the client?
ahhhh, that magical line....
Posted by: Gary Miller | March 28, 2013 at 08:55 AM