[2] In well-managed firms, billable hours are monitored monthly to project cash flow and to find out who is working and who is not.
A decrease in billable hours invariably translates to reduced collections some time in the near future.
[1] The terminology is not uniform across industries, as "lawyers, consultants and accountants use the term 'billable hours', while marketing communications firms refer to 'utilization rates' or 'chargeability'".
[4] The primary alternatives to billable hours are a flat rate for specific transactions, or the assessment of a contingent fee for the entirety of a given matter.
Firms relying on a billable hours performance standard should also note that, while easily observable, quantifiable, and certainly relevant to the law firm's goals, such a standard does not measure the quality of a lawyer's work (except to the extent that sloppy work has to be redone, occasioning even more hours) nor does it begin to consider career development.