At the risk of stating what perhaps should be obvious, lawyers valued for their abilities and insight are generally happier. They are certainly happier than those valued almost entirely on their production (i.e., billable hours). The latter group is by and large less healthy than the former. And in the long run, the happier lawyers are more–not less– productive than their unhappy, stressed out brethren.
Makes sense, right? Then why do so many law firms evaluate and compensate lawyers–especially associates–based on the billable hour yardstick? Maybe it’s because of a lack of empirical data demonstrating the advantages of the long-term view. If so (and as set out below, I am not convinced that that is the case), at least now there is data that confirms the obvious. Happier lawyers are more likely to be more productive over the long haul.
A recent Study was done by Krill Strategies, a consulting firm that endeavors to understand and address lawyer mental health and workplace stress, and the University of Minnesota’s Department of Psychiatry and Behavioral Sciences.
The Study, which was peer-reviewed and recently published in the scientific journal Behavioral Sciences, confirmed what many of us have long suspected. One thousand nine hundred fifty-nine legal professionals participated in the Study; 50% were women.
The main takeaway: lawyers whose firms do not value them except based on billable or provide little other feedback are the most unhappy. They also have the worst health outcomes overall.
The Study broke down the participants into three groups. The most problematic group consisted of lawyers who felt unvalued by their employer except based on productivity. (The group also included those who lacked insight into what their employer valued about them). The lawyers falling into the undervalued group were primarily from firms that value productivity (billable hours) and financial contributions (client generation).
The overall hypothesis of the Study was that those in this group would fare the worst based on measures of health (stress, mental health, and physical health). And those in this group were more likely to evidence poor workplace practices (overcommitment and substance abuse). Not surprisingly, this hypothesis turned out to be correct.
27% of lawyers surveyed fell into this group. And the larger the firm, the more likely the lawyers surveyed would fall into this undervalued group.
The law firms that value productivity above professional skill and human worth, in fact, will ultimately experience lower levels of productivity
The result: the law firms that value productivity above professional skill and human worth, in fact, will ultimately experience lower levels of productivity and higher healthcare costs.
Losing lawyers at any level is terrible, given that there is right now more work to do than lawyers to do it at many firms. In addition, stress and decreased well-being usually result in subpar legal work, increasing the risk of expensive mistakes. Not to mention the fact that, at least today, unhappy lawyers vote with their feet, leaving those firms whose view of worth are billables. Not to mention the loss of investment firms make in their lawyers, mainly associates, if they leave.
Of course, these firms will be the quickest to dismiss the idea that they are experiencing high costs associated with lost productivity. These firms will point to the fact that their lawyers are outwardly meeting billable hour requirements and, in management’s view, are performing at a high level. But this can only be sustainable in the short term.
Lawyers who work in environments that value professionalism, skill, and humanity over productivity, on the other hand, are in better health. They experience lower levels of stress. They do better work and grouse less. They are more apt to stay put.
So why don’t more firms alter their culture and value things other than billable hours?
I suppose the productivity oriented firms might say there is precious data to back up what, to me, seems obvious. Well, now there is data. But I think the real reason firms seem prone to shoot themselves in the foot over this has less to do with data. It instead has more to do with short-sightedness and tradition.
The billable hour business model inevitability emphasizes billable hours, particularly for associates. Billing more hours creates more revenue. Using hours to assess lawyer worth ensures the hardest workers are rewarded the most. This, in turn, encourages lawyers to bill even more. (It continues to amaze that in many law firms, a lawyer with a $5 million book of business is expected to bill just as much as a lawyer with little business. A lawyer who can bring in $5 million worth of business by playing golf every day with clients should be encouraged to play more golf, not bill more hours.)
Yes, doing good work indirectly results in happier clients and more work. But it’s an indirect and more difficult to prove relationship. After all, what is or is not good legal work is often subject to manipulation.
Since most law firms divide profits at the end of the year and invest little in the future, it’s not surprising that long term growth factors are often ignored
Moreover, using billable hours as the key measure is easy. It’s objective and not in the eye of the beholder. Given the inertia that often permeates law firm management, it’s not surprising that the billable hour remains the key metric. And since most law firms divide profits at the end of the year and invest little in the future, it’s not surprising that long term growth factors are often ignored.
Using billable hour metrics also ensures lawyers, who are by nature a competitive lot, bill more and more and work harder and harder. So lawyers coming up through the ranks are myopically focused on the billable hour at the expense of all else. There’s a lot of “I had to do that, so you must too” influence in law firm and associate management.
Understanding the relationship between mental health, being valued for things other than the billable hour, and quality productivity requires a long term view. It requires strategic thinking. Studies like that done by Krill may at least get the management of some firms to think more about mental health and lawyer well being. It’s not just touchy-feely stuff. These factors truly impact the long term bottom line.
But let’s not think about them this year. And therein lies the problem.