Ahh, autumn. In Vancouver, it’s the time of year when we clean out the gutters, check the sump pumps and the drain tile, invest in a new raincoat and umbrella, and try to figure out how to escape the monsoons that will keep hitting the west coast until oh . . . January.
Ironically, we call these annual monsoons “pineapple expresses” because the rain comes from Hawaii and other places we’d prefer to be by now.
We put up with monsoon season on the west coast because it fills our reservoirs, gives us hydroelectricity and a place for salmon to spawn. And, my personal favourite, it dumps loads of snow on Whistler and the local mountains so we can zip off early on Fridays to ski. You should know that I pay little heed to “no watering days” in the summer, because come autumn, every day will be a watering day.
We are also getting geared up for the Winter Olympics here in la-la land; at least in the Lower Mainland and in Whistler. The Olympics will more or less close the core of Vancouver (where all the major law offices are) to automobile traffic, creating a unique social experiment: can lawyers actually work more productively at home for two weeks?
What if they’re more productive from home than at the office? Do law firms need all that office space if lawyers work better at home?
The B.C. government is also creating a unique social experiment in Bill 13, where it is purporting to give municipal governments where Olympic events are being staged, the right for two weeks in February to enter private property and physically remove “graffiti” — “graffiti” being “code” for anything that criticizes the games.
I’m not a Charter of Rights expert, but I know a Charter case when I smell one! Although I actually support the games, I wonder if the anti-Olympic police can stop me displaying anti-Olympic “graffiti” in my car or on the back of my raincoat? I think it’s worth a try, just to test the law.
However, these are topics for other columns. In la-la land, there is always something to write about, and as we get nearer to the games, I'll be writing about them.
I wanted to discuss autumn because it’s the time to get serious about your accounts receivable. If your compensation formula is anything like mine (and even if it’s not), you will be judged (and perhaps even paid) on the basis of the “cash in” you bring in by the end of December. So this time of the year, I want my clients to show me the money.
I’m amused by lawyers who judge their performance (and the performance of their colleagues) by the number of billable hours they have recorded by now.
“Ooh . . . I’m at 1,600 already,” I overheard a junior associate from another firm tell her colleague last week . A friend from Toronto boasted about getting another hour recorded in his timesheet every day just on his BlackBerry.
Whether the “target” is 1,600 hours or 2,000 hours, using hours as a measurement of performance is like the kid at Christmas being more interested in the box than the gift.
Hours docketed have nothing to do with value and may in fact be a disincentive to efficient practice.
But here's where reality bites: If you’ve ever practised on your own or in a small firm, you’ll know that it’s the money that counts more than the hours. This is because landlords and employees don’t normally accept billable hours instead of rent or paycheques.
Even at larger firms, the lawyer with more cash in will normally get compensated more than the lawyer with more billable hours. And if not, the lawyer who brings in the cash will soon be cashing out and moving to a firm that realizes that cash is always king.
Hours are like smoke, wafting in the air. Or better yet, they’re like derivatives, credit swaps, hedge funds, and other forms of securitization; financial products that were supposed to represent something that was supposed to represent money, but didn’t.
Billable hours are similar, aren’t they? They might turn into dollars or they might not. We’re so addicted to billable hours as a measurement of performance, we’ve convinced the banks to lend our law firms money on the basis of our work in progress (i.e. our unbilled hours).
Recording for one’s time, like day labourers do (but other professionals like doctors, judges, and university professors don’t) has its little conundrums doesn’t it?
If I charge my clients by the hour but whip an agreement together in 18 minutes simply because I’ve done it 100 times before and know what I’m doing, why must I record a point three ($120 at my “rate”) when the thing’s worth at least $1,000 to the client.
“Oh but that’s why we can premium the client” it is said. Ever had a discussion with a client about why you added $880 to the account when they were expecting to be billed by the hour? Ever wasted your time having an account reviewed? Have you read the Inmet Mining case yet?
Ahh, but that’s the subject for a book, isn’t it.
What about accounts receivable? My advice? Get serious about them. Don’t always rely on your accounts receivable department to get your bills paid. If they’re your clients, call them up and get yourself paid — if for no other reason than if you don’t value the advice you give and the work you do, why should anyone else?
If you normally don’t get retainers, why on earth not? Weren’t you around during the great recession of the last 15 months or hear about the bankruptcy of General Motors and Chrysler? Or were you off in some parallel universe where everyone paid their lawyers what was billed within 14 days?
If you don't get engagement letters explaining the terms of the legal representation (and potentially authorizing you to change $1000 for a document that takes you a 0.3 to produce), you my friends, are in la-la land, not me.
So during the last quarter of 2009, if work comes in the door from a new client with no payment history, get an engagement letter explaining what the deal is (and what it isn’t) and get retainer for the amount you think you'll be billing them by Christmas.
For old clients who have established a payment history with you, politely tell them you expect the bills to be paid for the work they are giving you by Dec. 31, with a nice, but professionally responsible hint that if they can’t do this, maybe you shouldn’t either. Everyone has a Visa.
This may all sound callous or glib but it’s not intended to be. I am fortunate to have a dedicated client base and the privilege to act for clients for over 20 years. Ironically, many of them are in the restaurant industry as I once was.
Thirty years ago, I used to be a waiter (at the Keg if you must know). I can’t remember a customer who ever ordered a meal who didn’t expect to pay for it in full on the way out the door.
Metaphorically speaking, in the legal business, the “door” is Dec. 31 for most of us. So get serious. Get paid.
It’s not a bad policy to consider now that it’s monsoon season again in la-la land.
Vancouver franchise lawyer Tony Wilson has written for various legal and news publications. He is associate counsel at Boughton Law Corp. His e-mail is [email protected].
Tony’s column will appear six times a year on canadianlawyermag.com
