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Is the Billable Hour Holding Your Law Firm Back? Rethink Value with a JTBD Framework

By Brian Balistreri posted 04-12-2023 12:12


Please enjoy this blog posted on behalf of the co-authors, Kristin Rhodes, Senior Practice Manager, Paul Hastings LLP and Nikki Shaver, CEO, Co-Founder, Legaltech Hub. This is a follow-up to a prior post by Kristin Rhodes and Harriet Joubert-Vaklyes in a series that aims to reexamine the cultural and structural norms at law firms.

If you work at a law firm and have decided to read this post, you are likely starting with a healthy dose of skepticism: the billable hour isn’t going anywhere, so why bother?

We get it. But we also think that the billable hour promotes both an internal cultural divide (between the practicing attorneys and everyone else) and limits the potential to meet external client demands. Given such effect, isn’t it worth considering other ways firms could codify their value?

Let’s start on the external limitations.

The billable hour reinforces the value of a singular input—lawyer time—while ignoring the capabilities that firms must bring in order to serve their clients holistically and become their trusted strategic advisors. Only a small proportion of legal work is performed without any technology or support from professionals who are not lawyers. And yet firms often fail to charge for the products and additional services that have become critical to that work.

By elevating the billable hour above all other forms of revenue generation and other pricing methodologies, law firms remain stuck in a structure that defines the value of work being done by the time professionals spend doing it – rather than by the value of that work to the client. This approach to legal work is one of the major hurdles standing in the way of more efficient workflows. If work that takes longer generates more revenue, there is little incentive to adopt technologies and processes that might speed up that work.

With clients developing greater sophistication around technology, and demanding greater transparency around the ways that lawyers work, the lifespan of the traditional legal pricing model is likely short.

What if firms focused less on the billable hour and more on the job to be done? What if value to the client was defined and priced by the outcome (outputs) and not on the hours driving the result (inputs)? What if firms could be more efficient and make more money?

The Jobs To Be Done Framework

Jobs To Be Done (JTBD) is a concept stemming from service design and product management that encourages a focus during problem-solving on the desired outcome for end-users (or the people affected by the problem). The framework recognizes that people buy products and services for the purpose of getting a particular job done.

It’s important to recognize that the desired outcome is often not what the end user will initially ask for. The classic example of JTBD is that of a drill – if someone tells you they need a drill, JTBD asks you to dig one step deeper. The requester’s need or desired outcome is not the drill. What they actually want or need is a hole in the wall. That is the job to be done.

Finding the job to be done in any given situation requires an examination of the situation and end user needs along the following lines:

  • ·        When I [insert situation]
  • ·        I want to [insert motivation]
  • ·        So I can [insert outcome]
  • ·        In order to / making me feel [end result / emotion]

The JTBD framework is predicated on the notion that examining and solving problems through this perspective will get problem-solvers closer to actual user needs, ensuring the delight of customers.

Applying JTBD to Legal Services

Although legal services seek to solve end user (client) problems, they are not always valued by whether or not a lawyer is able to deliver the desired outcome to a client. Instead, most often we continue to sell legal services by the time it takes a lawyer to deliver the service.

If we turned that model on its head, and instead valued legal services by the outcome provided to the client, it would allow lawyers and law firms to put client needs first. Efficiency and productivity would be unrestrained by the billable hour. Legal teams could more easily utilize:

  • ·        Legal project managers
  • ·        Data analysts and other specialists
  • ·        Internal precedent libraries
  • ·        AI technology and custom tools
  • ·        Client data rooms and dashboards

All these services are designed to cut down on attorney billable hours while improving client deliverables. Law firms who deliver based on client needs will be well positioned to absorb market disruptions ahead, like AI technology and calls for greater transparency and efficiency. 

Our next post will delve into our informal survey of the market, what challenges might lay ahead, and also discuss how improving this model can enhance a firm’s culture.