Billable hours are hours worked by an

employee Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any o ...

for an

employer Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any ot ...

that are billed to the employer's

client Client(s) or The Client may refer to: * Client (business) * Client (computing), hardware or software that accesses a remote service on another computer * Customer or client, a recipient of goods or services in return for monetary or other valuabl ...

.Horace R. Brock, Charles Earl Palmer, Linda A. Herrington, ''Cost Accounting: Principles and Applications'' (1989), p. 547. In certain professions, particularly in

law firm A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise clients (individuals or corporations) about their legal rights and responsibilities, and to ...

s, employees are required to bill a certain number of hours per month or per year, and those who bill more hours may obtain additional benefits such as larger bonuses or faster promotions. However, the practice of using billable hours has also been criticized for a number of reasons. Various forms of technology have been developed to track the billable hours generated by employees.

Use

Billable hours are the most used by most private lawyers and law firms to calculate the value of their work, with clients being assessed "a set rate, plus expenses, for each hour that the lawyer — or those working with the lawyer — devote to the case".John Parry, ''Disability Discrimination Law, Evidence and Testimony'' (ABA 2008), p. 113. Billable hours are "the hours for which clients are charged", while "some hours worked by the firms staff are not billable because the staff members are not involved in a consulting job for a client". The terminology is not uniform across industries, as "lawyers, consultants and accountants use the term 'billable hours', while marketing communications firms refer to 'utilization rates' or 'chargeability'". The primary alternatives to billable hours are a

flat rate A flat fee, also referred to as a flat rate or a linear rate refers to a pricing structure that charges a single fixed fee for a service, regardless of usage. Less commonly, the term may refer to a rate that does not vary with usage or time of us ...

for specific transactions, or the assessment of a

contingent fee A contingent fee (also known as a contingency fee in the United States or a conditional fee in England and Wales) is any fee for services provided where the fee is payable only if there is a favourable result. Although such a fee may be used in many ...

for the entirety of a given matter. Billable hours are typically measured by recording time in six-minute intervals.

Criticisms

One court has noted that "problems created by billable hours have brought about a storm of criticism directed to the legal profession, especially when there are excessive billable hours".Avila v. Coca-Cola Co., 728 F.Supp. 685, 715 (M.D. Fla. 1989). Criticisms of billable hours include the fact that a person doing more hours of work is not necessarily doing a high quality of work, and that work quality may in fact be diminished over time by an excessive workload. Lawyers trying to increase their billable hours may behave in ways that are not in the interests of the client. Furthermore, billable hours often do not encompass all of the work that employees are required to do, for example excluding work for the firm that is not billed to a particular client. It has been noted that firms with high billable hours requirements may lag behind in terms of ''pro bono'' work, and that other tasks falling outside of the billable hours requirement may be given inadequate attention. Billable hours "create an economic incentive for lawyers to charge for every hour of work that can be identified".

References

Employment compensation {{labor-stub

Use

Criticisms

See also

References