Very low estimates of chargeable hours in a British law department (Aviva)

According to Law Dept. Quarterly, Sept.-Nov. 2006 at 45, for a full-time lawyer in the Aviva legal team the “ideal” would be “1320 hours of chargeable time a year.” Mary Ward, the head of legal operations for the 90 lawyer group, observes that “actual figures are frequently higher.”

Indeed. The usual estimate in US law departments for the number of chargeable hours worked by in-house counsel is 1,850 (See my posts of Sept. 25, 2005 about using 1,850 chargeable hours as a proxy; Oct. 18, 2005 on how to calculate your figure; Nov. 16, 2005 on uses of the internal cost per hour; and Sept. 5, 2005 on European law departments at about $220 an hour.).

A lower chargeable-hour estimate makes a huge difference in per-hour costs. If a 10 lawyer department averages inside costs of $500,000 per lawyer, then at 1,850 chargeable hours each lawyer costs the company $270 an hour. At the Aviva figure of 1,350 chargeable hours, each lawyer costs the company $370 an hour. The US standard figure is 37 percent higher than the Aviva ideal figure, which drives up the cost per lawyer hour by 37 percent.