What Are Billable Hours and How Do They Work?

Billable hours are how law firms make money. Clients pay by the hour, associates track their time, and the firm bills accordingly. Simple concept, tricky in practice.

The Basics

Law firms track time in six-minute increments, or tenths of an hour. If you spend 18 minutes reviewing a contract, you bill 0.3 hours. If you spend 7 minutes on a quick email, you bill 0.1 hours (you round up to the nearest tenth).

Every task gets a time entry with a description:

Reviewed and revised draft asset purchase agreement; prepared redline reflecting client comments, 2.4 hours

You'll log dozens of these entries every day.

What Counts as Billable

Billable: Research, drafting, reviewing documents, client calls, negotiation calls, travel for client matters (at some firms), preparing for and attending depositions or hearings.

Not billable: Internal meetings, trainings, business development, administrative tasks, recruiting events, most pro bono (though some firms give partial or full billable credit for pro bono).

Tips for New Associates

Enter time daily. Don't wait until Friday. You'll forget half of what you did and your entries will be vague. Partners read time entries, they're a reflection of your work.

Be descriptive but concise. "Research" is bad. "Researched Delaware case law on fiduciary duties in conflicted transactions" is good.

Don't pad, don't short-change. Bill honestly. If something took 2 hours, bill 2 hours. Overbilling is an ethical violation. Underbilling hurts your numbers and the firm's revenue.

Keep a running timer. Most billing software has a timer function. Use it. Reconstructing your day from memory is a losing game.

Understand your firm's policies. Every firm has quirks. Some cap travel time. Some give billable credit for certain internal activities. Learn the rules early.

Why This Matters

Your billable hours are the single most visible metric of your performance, especially in your first few years. They're not the only thing that matters, quality of work, reliability, and attitude count too, but hours are the number everyone sees.