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Start monetizing those unused (discountable) billable hours | ABA Journal

Recently, a business trip took me to Paris. As the schedule was tight and I had a number of appointments across the city, I had to frequently rely on Uber to get me places in time. Doing a number of comparable rides over a couple of days, I started to notice that the prices could significantly differ. The same ride from A to B could be more expensive in the early afternoon than midmorning. When at some point it had started to rain, the price almost instantly went through the roof.

This was a live illustration of how Uber’s pricing model works. It is almost like an auction: if demand is high, the price will go up; and in times of low demand, the price will drop. This so-called dynamic pricing is used as a sophisticated form of revenue management. Price is tailored to maximize revenue in relation to costs.

The vast majority of lawyers do not manage to consistently write eight billable hours a day. Utilization—billable time as a percentage of the target—is typically at 90 percent or below. In almost every law firm we know, there is time not used to work on client matters. What if we could monetize these idle hours? That would instantly create a significant boost in profit.

So why couldn’t law firms learn from Uber’s pricing strategy? What if we would introduce revenue management to the legal world?

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Start monetizing those unused (discountable) billable hours.