Ironic: perturbed over hours billed by outside counsel, but attracted by cost-per-hour inside

General counsel, or at least a number of vocal ones, lambaste hourly-based billing by the firms they retain. “It’s not the time spent that matters,” they thunder, “it’s the value of that time!” Heads everywhere nod in agreement, although feet stay planted.

At the same time, general counsel, or at least those quantitatively inclined, pore over benchmark reports that show fully loaded costs per in-house lawyer hour. Some care if their troops march at $221 an hour and the median in their peer group stands lower at $208. Some of them in large departments even track internal time and charge clients for it.

For both internal and external counsel, the better measurement would be value delivered. Hang the hours – with both meanings of hang implied – and look to productivity. That is what makes it ironic to criticize hours outside as a measure of worth, but to attend closely to cost per hour inside as an indicator of comparative performance.

The reason hours stand as a proxy for productivity, of course, is that no wizard has proposed any measure that is as easy to use, well understood, and broadly applicable to show output in qualitative terms.

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