Are Cab Drivers Smarter Than Lawyers?

Published November 1, 2005

When traveling in New York recently I had to engage a taxi to go from the airport to my son’s home, and didn’t realize the New York rule was that taxis are shared. When I engaged the taxi, I was told the fee was $30; another person also engaged a taxi and was told that the fee for him was $20. I didn’t realize at first that we were both going in the same car. As we were driving, I started to think about the fact that we were being double billed. The taxi company was getting $50 when, if only I were the passenger, it would get $30.

Was there anything unethical about this? Not at all! Taxi companies charge a fixed fee based on the value of the ride, not based on time. Contrast that with lawyers, who almost universally bill based on time alone. If a lawyer is sitting on a plane or waiting at the courthouse in order to handle a matter for Client A, can he or she use the time to work for Client B? The rules of professional conduct in most states require billing only one client at a time because time, billable minutes, is the measure of value.

Businesses that do not bill on the basis of time can earn more for their service or product when they become more efficient. The more efficient lawyers become, in our current business model, the harder we have to work to earn the same money as before. Lawyers don’t really sell time. Our goal should be providing value: advice that means solutions to our clients. Yet since the mid-1960s, when clients began demanding detailed billing statements, lawyers have used time records as our management tool to seek greater efficiencies. Today, most lawyers are paid by the hour almost in the same way as an hourly laborer. Our billings are “features” lists: this is what I did, this is the time I worked and this is what you owe me. That approach doesn’t address value and benefits, the worth, as opposed to the cost, of the service.

Good service, value and solutions shouldn’t be vague buzzwords. All lawyers, sole practitioners and members of mega firms alike, can structure what they do to consistently encourage a high client perception of value. Here are just a few ideas.

  • Return phone calls quickly, at least within two hours at most
  • Have information about your practice available in your clients’ primary languages
  • Prepare clients for what they’ll experience in negotiations, depositions and court testimony
  • Ask clients for feedback about how well you’re serving them.

Lawyers who charge for the concept of value, and not strictly for time, have more control over their practice. Often, when I coach attorneys who are dissatisfied in their practice, it’s soon apparent that their real dissatisfaction is with measuring their days in six or ten-minute increments and losing focus on the essence of their skills. Lawyers work hard, spending many hours in their efforts to meet clients’ needs and objectives. It’s much better, more effective, to say that our time is measured in value (investment) rather than cost (expense).

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Audience type: Associates