There's no such thing as non-billable hours

The false dichotomy of "work that matters" and "work that doesn't" wreaks havoc on law firms' priorities and lawyers' morale. Here's how to escape it.

I’ll disclose up front: I have a problem with any phrase that starts with “non-”. If you’ve heard me complain in the past about “non-lawyer,” you’ll already know this. “Non-” divides the world into two groups: who or what matters, and who or what doesn’t. Whatever follows “non-” is elevated to the very pinnacle of importance — it’s the only thing worth naming. Everything and everyone else is homogenized, anonymized, and relegated to lowest-class status. The point of “non-” is to divide, exclude, and negate. I don’t care for any of those.

That leads us to one of the most common phrases in law firms: “non-billable hours.” Managing partners and practice group leaders use this term all the time, reflexively, to describe anything and everything lawyers do that can’t be billed to a client. Business development, marketing, administration, communication, training, management, leadership, pro bono work, saying good morning — you can’t get a client to pay the firm for any of these things. They’re “non-billable,” which means they’re fundamentally not as valuable as billable work.

You can see the trick that’s being pulled here. Putting “non-” in front of “billable hours” signals that there’s nothing more important than billable activities — it’s the only thing worth naming. This creates an instant hierarchy: things that clients will pay for are above, and everything else is below. And since all unbillable activities are equally useless when it comes to revenue, therefore they are all of equal unimportance. In the billable-hour world, management and training have as much value as saying good morning.

Now, not even the most cartoonishly villainous senior partner really believes that training new lawyers or managing staff is a waste of time. But “non-” is an all-or-nothing modifier. It has no nuance. Law firms don’t talk about “less billable hours” or “semi-billable hours,” because billable status is like pregnancy: either you are or you aren’t. (Not even all “billable hours” are actually billable — look at the piles of lawyer hours written down onto the cutting-room floor because they weren’t considered valuable enough to get paid for.)

We could address this problem by trying to introduce the kind of nuance I mentioned above, trying to more finely sort the grain of partly useful activity from the chaff of completely non-useful work. But I have a more radical proposition: a fundamental reframing of how we classify lawyer activity in a law firm.

I submit that every hour of work performed by a lawyer is billable. It’s just not billable yet. The eight hours a young lawyer spends at an industry conference, appearing on a panel and speaking with corporate attendees afterwards, will be billable ten months from now when one of those attendees opens a file with the firm. Or if none of them do, those hours will be billable in a couple of years when the business development experience the lawyer gained at that conference pays off in similar circumstances.

Approach the issue differently if you like: When a partner does land a new client, do we think that happened by magic? That the partner somehow entered the world at birth with an easy and uncanny gift for client acquisition? Of course not. She landed that client because of everything she learned from the 50 hours spent on the five previous prospects that she didn’t land. None of those hours was wasted. They all had value, accumulating over time and manifesting as the lawyer’s experience, insight, and wisdom.

Look again at that list of “non-billable” activities above — business development, marketing, administration, communication, training, management, leadership, pro bono work. Every one of these things is what makes the billable work possible.

These are the hard yards of building and running a professional services business. They create and support the operational infrastructure, the growth of expert teams, the messaging to the market that there are great lawyers here ready to help you. Hell, even saying “Good morning” is billable work, insofar as that absolute minimum level of politeness contributes in a tiny but real way to a positive working experience and helps lawyers do a little bit better than they otherwise would have.

Everything lawyers do in a law firm is either directly billable to a client today, or it’s laying the foundations for billable work tomorrow. There are “immediately billable” hours in a law firm, and there are “future investment” hours in a law firm, and both are important.

By using a negative, exclusionary term like “non-billable hours,” law firms fracture the mental and emotional pipelines that connect investment to revenue. They communicate to their lawyers the ironclad rule that unless a client pays us for your work, it wasn’t really worth doing. And since lawyers have to spend a lot of time on non-billable work, it also make them feel that they don’t matter. Ask almost any lawyer what they feel the firm really cares about, and they’ll tell you: The almighty dollar. The sacred billable hour. “Non-billable hours” is the delivery mechanism for that message.

If you want to strengthen your firm, to raise morale and reduce attrition and incentivize the behaviours that make law firms great, change your terminology from “non-billable hours” to “investment time.” Tell your people that their work should be geared towards bringing in revenue now or bringing in revenue later, and both these categories of work are valuable. The atmosphere change in your firm will be palpable.

And if you’re still not convinced, remember that Generative AI is gradually but irreversibly draining your inventory of billable hours, driving the legal industry towards pricing and compensation systems that aren’t time-based. There won’t be “billable hours” in future law firms: There will be work that benefits clients and work that benefits the firm, and both will make money, overlapping much more than you expect.

The “non-billable hour” is becoming an artifact, compromising your firm’s structural integrity and embittering your lawyers along the way. Retire it.