You sell hours. We remove some. That is a decision, not a benefit.
For an in-house team every saved hour is free. For a firm on hourly billing the same hour is revenue that stops arriving, and pretending otherwise in a sales conversation is how these deployments end in a difficult second year.
- 48
- fee earners
- 12,528 h
- capacity freed a year — 18%
- 13,079,232
- revenue at risk on the 72% billed hourly
- 18,165,600
- the same hours, if resold
18% rather than the 40% our review model produces, because that figure is for a review engagement and review is a fraction of what a firm does. Applying an engagement-level saving to a whole firm's billable base is the usual way this gets oversold.
Four things a firm can do with the hours
Three are deliberate and one is what happens if nobody chooses. The fourth is the most common.
-
01
Refill the capacity
Take on more matters with the same people. The only option where the efficiency turns into revenue rather than into a shorter bill.
-
02
Move work to fixed fee
Efficiency becomes margin instead of a discount. Firms that do this first are the ones for whom the arithmetic works from day one.
-
03
Bill the same and do it better
Defensible, and it shows up as quality rather than as a number. Partners are more comfortable with this than the finance director will be.
-
04
Do nothing and let it leak
The default. Hours quietly fall, realisation looks fine, and nobody connects the two for three quarters.
What a firm turns on first
In roughly this order, and the first two pay for the rest.
- Drafting from your own bank
- The distribution of what the firm has actually agreed, rather than a template somebody wrote in 2019.
- Review against a playbook
- Turns a partner's mark-up into a rule the whole firm applies, including the associates who have not sat with them.
- Time captured as it happens
- The one place the economics work regardless of fee model, because it recovers hours already worked.
- Handover briefs
- Associate attrition is the tax every firm pays. This is the part that reduces what leaves with them.