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Is the billable hour incompatible with DEI?

With many BigLaw firms placing diversity, equity and inclusion at the top of their priority lists, a significant number of lawyers believe that billables are holding progress back.

user iconLauren Croft 06 July 2023 Big Law
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Recent research from the Legal Services Board in the UK found that the billable hour and a lack of flexibility within firms were negating diversity, equity and inclusion (DEI) initiatives.

The culture of working long hours to achieve higher billable hours was said to exclude certain groups of people, with a number of anecdotal examples of being denied flexible working and working late into the night and on weekends to meet billable hours targets.

This has also been seen in Australia, with a fifth of lawyers recently admitting to working 50 to 60 hours per week and 13 per cent confirming their working weeks were often more than 60 hours.


Following this, Lawyers Weekly conducted a poll on LinkedIn, which revealed that 52 per cent of lawyers have found this to ring true in their own firms.

Billable hours are also increasingly at risk with the rise of ChatGPT and similar artificial intelligence (AI) tech, as partners in February told Lawyers Weekly that the dominance of the billable hour will “inevitably decline” in the current market.

Lawyers Weekly recently asked its audience, via a LinkedIn poll, if they thought the billable hour was incompatible with DEI objectives.

At the time of closing, the poll results were as follows:

Out of 247 votes, 52 per cent of respondents said yes, 31 per cent said no, and 17 per cent were unsure if the billable hour was incompatible with DEI objectives.

The LinkedIn poll is, of course, not a scientific study and should not be taken as such. However, it does offer an insight into the mindset of Australian lawyers and their attitudes towards the billable hour.

Billable hour at the expense of female solicitors

In recent years, many arguments have been levelled against the retention of time-based billing, including that it works against women and, at least for some, is a practice that should not be wished upon anyone.

However, in 2022, female solicitors outnumbered male solicitors for the sixth consecutive year, according to the 2022 Annual Profile of Solicitors NSW, released last week.

And since 1997, there has been steady growth in the overall number of solicitors; however, the growth rate of female solicitors has been consistently higher than the growth rate of male solicitors. Over this period, the number of female solicitors has grown approximately five times what it was originally, whereas the number of male solicitors has less than doubled.

This has, at least in part, to do with the rise in flexible and hybrid working and particularly relates back to the fact that female legal professionals are more likely to face the “motherhood penalty”, as well as be disproportionately impacted by inflation, not to mention the nine-to-five working week, which has been recently labelled “redundant” and “sexist”.

Diversity Council Australia chief executive Lisa Annese told Lawyers Weekly that while many law firms are “engaged in building diverse and inclusive organisations”, caring responsibilities can often mean female solicitors need more flexibility than their male counterparts.

“Any workplace practice that excludes individuals based on gender, disability, caring responsibilities or cultural background actively works against efforts to create a more inclusive environment. In particular, when a workplace practice prevents flexible working, employers risk excluding disabled people and those with childcare responsibilities or other caring responsibilities which disproportionately affects women,” she said.

“Caring responsibilities and workforce participation is a key driver of the gender pay gap, which sees Australian women earn 77.2¢ for every dollar on average a man makes. Our research on flexible working practices shows women make up around 83 per cent of those who seek out flexible work. The next highest demographic with flexible work requirements is people with disability at 76.1 per cent.”

Many law firm leaders have also emphasised the importance of flexibility, particularly for working parents, as well as why mastering hybrid working will be key moving forward, especially in a candidate-driven market.

And according to Hive Legal principal Adrienne Trumbull, the billable hour is “absolutely” hindering the progression of inclusion, in a number of different ways.

“Rewarding individual performance for time-based billing rewards those who a) are able to commit the longest periods to their desks (whether they be virtual or physical); and b) are given the matter opportunities to deliver that billable time. If you are providing incredibly valuable contributions more quickly, you will be deemed a lesser contributor, even where your outputs are better,” she explained.

“This becomes a significant problem where you are operating efficiently because you don’t have the extra hours in the day — for example, you have to collect your kids from childcare and get them into bed, or you need to attend medical appointments with elderly parents or family members with disabilities. For some, this makes it more difficult to observe cultural or religious events in the midst of what might be other’s normal working hours, e.g. Ramadan.

“What’s more, you’re probably less likely to be given the work in the first place if you’re not hanging out in the office after hours, or if you’re different in approach to the more traditional style of your instructing partner. Unless we change the construct, we don’t give those in these circumstances an even playing field.”

Focusing purely on billable hours can also affect a variety of other business aspects, not just DEI. Therefore, Hicksons partner Naomi Tancred said, flexibility should be a priority for all firms.

“To me, more importantly than the billable hour is the consideration of a firm’s culture. When the priority is placed on culture and people, DEI is advanced. I enjoy working in a firm that supports our people achieving their personal goals, both in their professional and private lives. This requires true flexibility, not just in the number of days you work, but how you work, where you work and over what periods of time you work,” she explained.

“For example, in our firm, where we have a high proportion of women, there are partners (both female and male) who work part-time and at different hours so they can fulfil their parental responsibilities — and quite a number of them do so while billing on a time-costed basis. It is not only parental responsibilities that need to be considered; the research refers to the need to support other personal challenges or interests. I think they fall into the same categorisation of what is being valued most by the firm.”

If firms are taking DEI measures seriously, how long does the billable hour have left?

While Ms Trumbull has “no doubt there is a committed focus on DEI measures within BigLaw”, in an ideal world, the billable hour “would end tomorrow”.

“What I suspect these firms are ignoring is the impact that time-based billing has on the overall culture of the firm — namely success of an individual rather than success of the firm as a whole. Addressing this needs to go hand in hand with any long-lasting commitment to growing diversity and inclusion,” she added.

“[But] I think even where traditional law firms acknowledge the benefit of fixed fees or value pricing, they will be reluctant to ditch time recording for some time. That’s because the structure of most traditional firms is entirely built on individual performance, and performance is determined on metrics of time only. I am hopeful that over time, these firms will realise that time alone as a measure of performance not only incentivises a damaging type of behaviour but is also not aligned with the outputs, traits and cultures they are trying to create within their firms.”

Ms Tancred echoed a similar sentiment — and said that despite DEI being on many firm’s “must-do’s”, how well firms “embrace and implement the requisite changes will make a noticeable difference to the outcome”. This, she opined, is already being reflected in DEI targets set by both law firms and clients alike.

The industry is in the middle of a significant challenge in talent attraction — which can only be positive for driving better DEI change. It is worth questioning — is this being reflected in the billable targets? In the workers’ compensation practice, our predominant billing structure is based on fixed fees. This allows greater flexibility, which has proven key to ensuring people can keep living their lives whilst achieving professional success. A lot is said about value-priced billing, yet there does seem to be some reluctance in clients adopting this on a broader basis.

“I think this is where BigLaw can do more to gain greater buy-in from clients and facilitate a billing structure that is less weighted towards the billable hour. I personally think law firms are taking their DEI measures very seriously. Society is placing much greater importance on diversity, and there is no doubt that firms are investing in progressive measures because it is needed to retain and attract good people,” she said.

“The focus on people (including flexible working, psychological and physical wellbeing) is becoming increasingly important, especially with the talent war going on in an increasingly competitive environment.”

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