'Tyranny of billable hours' in professional service firms
17 August 2012
New research from the Faculty of Management at Cass Business School found a culture shaped by the 'tyranny of billable hours' in professional service firms that leads to over-charging clients, overworking junior employees and avoiding strategic issues.
The researchers found that professional service firms tend to group clients into 'bill sensitive' and 'unsensitive', and charged accurately and overcharged respectively.
In addition, junior employees are often forced into working into their personal time to complete non-billable tasks. This culture, the researchers point out, hinders competency development at junior level. Progression is measured through the number of billable hours submitted as opposed to improving skills.
Finally, senior members of the firm avoided strategic and leadership issues to focus on bringing in more billable hours.
Professor Spicer said: "If you look at the history of how professional services firms were run, there used to be a strong professional ethos, it was all about collegiality and partnership. But as the big firms have become more like corporations ... billable hours have become more and more important.
"They talk about client service [being their primary focus], but in fact if you just scratch the surface what you find is billable hours still dominates."
The study was carried out by Professor Andre Spicer, Cass Business School, City University London and Dr Johan Alvehus Department of Service Management, Lund University, Sweden.
The research was featured in the Times newspaper on Monday 6 August. 'Thinking time is money could be expensive mistake.'
Watch Andre Spicer talk about the research in Cass Talks. Listen, watch and download Cass Talks