Billable hours and layoffs in the legal industry

The Texas Law Review published an insightful post regarding who gets laid off from law firms and why. Notice the relationship between billable hours and the perception of value:

So how are associates marked for extinction? Who lives, who dies, and why? It’s not simply a matter of hours. There is a calculus involved. Some firms really are “realigning,” or making up for lack of traditional associate attrition. Others are tossing deadweight as fast as possible from a sinking ship. But even though a number of agendas are at work, firms usually start at the same place: billables.

This kind of thinking relates to my notion of how value is created.  Those who sell their labour once to a firm are not as valuable as those that sell it a second time to a client. In this sense, the notion of employment itself has changed. If the purpose of the firm is not to employ people but to rent them out to other firms.

The employment relationship, under this logic, is not about selling one’s labour to a firm but providing one’s labour to a firm to sell to yet another firm. In this logic, law firms (or design firms that bill by the hour) are simply temporary agencies!

Read the entire article here.

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One response to “Billable hours and layoffs in the legal industry

  1. If you are planning a follow up story on layoffs expert and author Dwain Celistan is available to add insight to your story. Call 630-335-1611.

    If you are planning a follow up story on layoffs expert and author Marsha Petrie Sue is available to add insight to your story. Call 480-661-8756.

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