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The billable hour is a trap into which more and more of us are falling

timharford.com

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Re: The billable hour is a trap into which more and more of us are falling

#31

Post by invalidOrTaken »

InefficientRed wrote: post #10
RcouF1uZ4gsC wrote: post #2

> But I don’t think I’m over-romanticising to suggest that just as there is something psychologically corrosive about the fact that the lawyer can always bill another six minutes, there is something psychologically healthy about the fact that the farmer can sometimes rest assured that there is nothing useful to be done until the morning. This sense of a “forced” break from work, reminds me of the Jewish concept of th…

The loss of the sabbath in Christianity really puts a limelight on the dark side of grace. Rest is for eternity; clock back in.

As a Christian who observes the Sabbath---is this not common among Christians? (I am genuinely asking, somewhat disconnected from the wider world of Christianity)

Re: The billable hour is a trap into which more and more of us are falling

#32

Post by sph »

In my experience projects tend to go over specifications pretty much every time. Fixed billing means having to review the contract every so often, and it's much more of a pain than being paid hourly. You want something we hadn't discussed before? Sure, but you'll pay me for my time.

The goal is eventually to be paid by day or by week, but still proportional to the work you're putting in, unless you're a world class talent and can bill $100k for a week long project; at that point fixed prices will be preferable.

Re: The billable hour is a trap into which more and more of us are falling

#33

Post by lotsofpulp »

gnicholas wrote: post #27

Another downside of the billable hour: it encourages perverse incentives. I was recently talking with a potential customer in the legal field, and he was interested in my startup's software, which helps people read on screen more quickly/easily. But at one point he turned to me and said "I know one of the senior lawyers is going to ask me if using your software is going to cause the billable volume to go down for the…

From the other side of the table, efficiency is encouraged when dollars are on the line too. A buyer is going to prefer a law firm that minimizes expenses.

It is not like the law firm has a choice to keep using pen and paper to bill 100x the number of hours as others. They have to compete with other law firms.

Re: The billable hour is a trap into which more and more of us are falling

#34

Post by amlozano »

Penetration testing / security consultancy falls into this trap too. All the downsides are present.

It is weird, though maybe not so weird if you think about it for a few minutes, how closely aligned law and offensive security are with business practices.

One of the things I want to do with my consulting business going forward is to explicitly depart from this model. We will see if the market accepts it or not.

Re: The billable hour is a trap into which more and more of us are falling

#35

Post by movedx »

My approach to money has changed as I've come to better understand its purpose - the storage of a future promise to give me something I value.

This leads me to ask, "What do I value?"

I value my free time, being able to eat breakfast and coffee out on a daily basis, and simple things in life like just having a comfortable home, debts paid, bills paid, and a happy wife.

My approach to money has, therefore, become one of finding the maximum amount I need for the short term (six months), immediate term (two years), and extreme future (retirement; probably 60-ish), in order to meet those value driven targets.

Once the balance has been found between selling my time and labour for money, I don't exceed it, because I've attained my goals. I go from, "I could be earning $X in this moment if I worked on my book" to, "I should go for a walk and then come home and play a game."

Re: The billable hour is a trap into which more and more of us are falling

#36

Post by jedberg »

This is what did in one of my startups -- we did consulting to bring in revenue while we built the software, but the siren call of one more billable hour was always stronger than building the software, so we ended up making good money consulting but never built the product.

Re: The billable hour is a trap into which more and more of us are falling

#37

Post by Wowfunhappy »

gnicholas wrote: post #27

Another downside of the billable hour: it encourages perverse incentives. I was recently talking with a potential customer in the legal field, and he was interested in my startup's software, which helps people read on screen more quickly/easily. But at one point he turned to me and said "I know one of the senior lawyers is going to ask me if using your software is going to cause the billable volume to go down for the…

What was your advice on how to answer?

Re: The billable hour is a trap into which more and more of us are falling

#38

Post by Traubenfuchs »

gnicholas wrote: post #27

Another downside of the billable hour: it encourages perverse incentives. I was recently talking with a potential customer in the legal field, and he was interested in my startup's software, which helps people read on screen more quickly/easily. But at one point he turned to me and said "I know one of the senior lawyers is going to ask me if using your software is going to cause the billable volume to go down for the…

He is clearly not very good with that billable hour craze. By doubling efficiancy you can sell the same hour to two customers.

This is normal and encouraged in law and the consulting world.

Re: The billable hour is a trap into which more and more of us are falling

#39

Post by lazide »

lotsofpulp wrote: post #33
gnicholas wrote: post #27

Another downside of the billable hour: it encourages perverse incentives. I was recently talking with a potential customer in the legal field, and he was interested in my startup's software, which helps people read on screen more quickly/easily. But at one point he turned to me and said "I know one of the senior lawyers is going to ask me if using your software is going to cause the billable volume to go down for the…

From the other side of the table, efficiency is encouraged when dollars are on the line too. A buyer is going to prefer a law firm that minimizes expenses. It is not like the law firm has a choice to keep using pen and paper to bill 100x the number of hours as others. They have to compete with other law firms.

That assumes buyers are able to properly price shop, and can discover a law firm that is more efficient. Much rarer than one would assume.

Re: The billable hour is a trap into which more and more of us are falling

#40

Post by Traubenfuchs »

Wowfunhappy wrote: post #37
gnicholas wrote: post #27

Another downside of the billable hour: it encourages perverse incentives. I was recently talking with a potential customer in the legal field, and he was interested in my startup's software, which helps people read on screen more quickly/easily. But at one point he turned to me and said "I know one of the senior lawyers is going to ask me if using your software is going to cause the billable volume to go down for the…

What was your advice on how to answer?

„By doubling the efficiancy, you can use this to sell 16 billable hours per 8 hours of work.“
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