Clifford Chance is removing billable hours from consideration when it determines lawyers' performance bonuses.
The Magic Circle firm is testing the new approach for a year in the Middle East on all lawyers except partners.
Multiple factors feed in to the decision to award a solicitor a performance bonus, but the number of hours billed remained "the 800 pound gorilla in a bag of kittens", said an insider. In order to even things out, Clifford Chance is removing 'utilisation', the measure of total billable hours as a percentage of the total hours available, as a factor entirely.
The change is the most striking part of an experiment Clifford Chance is carrying out to see if it can encourage lawyers to focus on a wider range of activities than just billing, such as innovation, business development and training. As part of the pilot scheme, the lawyers will use desktop dashboards to capture time spent across a number of categories besides just billable work.
Under the scheme, compensation and bonuses will be based "on a balanced understanding of each individual's contribution" in line with the each lawyer's objectives, said the firm, but with billing thresholds "formally removed".
Matthew Layton, Clifford Chance Global Managing Partner, said the pilot in the firm's Dubai and Abu Dhabi offices was "trying to break the dominance" of the single metric of the billable hour to "allow our teams to think more broadly about where their time is best spent". That may, said Layton, "mean investing in time spent developing and applying process improvements to matters, rather than straightforward matter delivery".
"Our expectation is that this new way of working will bring material benefits to our clients", said Mo Al-Shukairy, Regional Managing Partner for Clifford Chance in the Middle East, "and that our people will also find that it provides new opportunities to explore their own professional development, while advancing the firm's strategy".
He's only billed one hour this year, but his personal development has been extraordinary.
Thanks to their cultural and geographical position, the Middle East offices of international law firms have a reputation for squeezing even more hours out of lawyers than usual. Although weekends often fall on a Friday and Saturday, lawyers are frequently still expected to deliver responses in line with the Western working week. And because the time difference means lawyers can feasibly respond within the working hours of clients and colleagues in time zones to the East and the West, the working day can get stretched both ways, too.
Lawyers at other firms approved of the move. A partner at a City firm told RollOnFriday, “I think this is a really good thing. Hours doesn’t encourage the right behaviour or service clients or your future career properly. People at [my firm] are giving it some thought too.”
“A lot of firms are talking about wellness and mental health", said a partner at a boutique London firm. "For certain neurotic individuals (like me), trying to bill nine hours in six minute chunks will drive you mad, in time.”
"Also, from a purely bottom line bonus point of view, in transactional law we just agree fixed fees anyway, so judging performance on hours billed is pure naval gazing. The more senior lawyers’ value is in their stickiness to clients – do they win and retain clients, and how much money and how many clients will they cost me if they leave?”