As I have mentioned in the past, I believe timesheets are nothing more than an illusion of control that partners think they have over their staff. In reality, it is the partner who is the slave to the timesheet. When customer Jim gets upset at the lack of service and decides to leave, who replaces the lost billable hours? Some options:
- New Business? Maybe, but if customer Jim was not getting the service, customer Jane probably will not.
- Innovative revenue streams? Maybe, but probably not. A firm obsessed with the billable hour are rarely innovative. Firms obsessed with the billable hour are interested in one thing: billing hours.
- Current clients? Ahhh, now we are getting somewhere. Yes, I am saying that lost business is made up with over-billing existing clients.
This is where it gets interesting and the phrase billable death spiral comes in. As a partner begins to compensate for lost business by over-billing existing clients, a billable death spiral forms. Clients recognize an increase in fees, they don’t see a change in service or value, and they decide to leave. One by one they go, until the partner is left with a small handful of clients, who will pay whatever, just because they understood that time is money. Beware: the billable death spiral is a nasty process and usually renders the partner cold, pissed off and alone. This raises the question: in the office, who is really in control?
hahaha. Love the way you wrote this post. Billable hours… pst..
On a happy note – just picked up a new client who was paying $260/hr for monthly “review” work who said the bills were “getting out of hand.” Asked what my hourly rate was and I told him, “I don’t know, we just have a fixed monthly fee.”
Value Billing 1, Billable Hour 0
Good work friend. Keep it up