Inside Out Culture
Cath Bishop and Colin Ellis - two people who have been at the heart of workplace culture for over 3 decades host a regular podcast that offers an insider’s view on culture and provides tangible actions that you can take on the outside.
As best-selling authors and consultants who work with cultures around the world, they not only talk about what's happening in the world of work right now, but also provide evidence and commentary to help you change the way you do things too.
From kindness to toxicity, from values to high-performance, Cath and Colin discuss a breadth of topics relevant to the way work gets done. Both are keen to help leaders, managers and colleagues gain competence and confidence to contribute more positively and proactively to their workplace environments.
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Inside Out Culture
Does the billable hour model undermine culture?
There have been a number of high-profile media stories recently - including suicide - that have highlighted the toxic cultures within consultancies, law firms and accountants.
This week on the Inside Out Culture podcast we look at the ‘billable hour' model employed by these companies and ask whether it creates the conditions for toxicity.
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Join us as we reveal strategies to close the gap and craft a workplace where values are not just spoken, but lived and breathed, paving the way for a more authentic and engaging organisational culture.
Instagram: @insideoutculture
Email your questions to: insideoutculture@gmail.com
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Welcome to the Inside Out Culture Podcast, where we look at insides of working culture and provide ideas, insights and actions for you to take on the outside. I'm Colin Ellis and I'm Cath.
Cath:Bishop, and in each episode we'll examine a different question or a different organization, and we'll use case studies, research and our own insights and experiences to help you change the way things get done in your world.
Colin:We hope you enjoyed today's episode. Please like, subscribe and, of course, let us know what you think.
Cath:Hello and welcome to another episode of the Inside Out Culture podcast, and today our topic is does the billable hour model undermine culture? So I feel this is a bit of a taboo, this is a bit of an unspoken elephant in the room in certain organizations and we want to, yeah, get it out, get the elephant addressed and think about what does it mean, what are the implications? And it's one we've had a few discussions, sort of offline, but was always going to be an important topic for us to think about from some different angles, to explore a bit more fully. So how do you come to this topic? Neither of us are lawyers or accountants. I haven't worked in a billable hour organization, although I've worked in a sort of if you only do, medals, that's what counts, which is maybe a little bit of that mentality. But what's in your mind coming to this topic?
Colin:Well, this was a request that we had and just a reminder that if you'd like us to cover a topic, you can drop us a note at insideoutculture at gmailcom, from an accountant and he's a partner and he asked me not to mention him, but you know who. You are listening to this, so thank you for the suggestion and someone who takes great pride in the culture of their accounting firm. And he basically said listen, is it something that you would cover and talk about? And there was a particular high profile suicide in a law firm in London earlier this year I think it was no, it was last year, it was the end of last year and I remember it because the person in question had been working on the sale of Everton Football Club. If you listen to the podcast, you know that's my football team, so it kind of came up into my newsfeed and they were under lots and lots of pressure.
Colin:And then there was a great piece that I read earlier this year in lawcom because it was a story I was following that basically said and we'll share the link in the newsletter that it reminds us that law firm culture is still toxic. Why does it survive? And so my accounting friend was talking about this and said listen, it drives a certain kind of behavior and ask the question is it something that we're seeing changing generationally? And certainly from the research that I've done and I did some research for my next book, detox your Culture, and there was a particular story about Cleveland law firms and how the billable hour was creating toxicity there, and so I think it's definitely worth covering. Cath, I'm not sure that we've got the answer to solve the problem, but you're absolutely right. Let's talk about the elephant in the room. I've never worked in a billable hour culture myself, although I, as a former senior director, particularly in the public service, I worked with a lot of billable hours cultures and often they left a lot to be desired.
Cath:So billable hours, actually often a billable six minute increment, so even that is probably worth thinking about. We want to deepen our understanding of what the costs are of these environments. Are there some benefits and what is likely to perhaps happen over the next period? I certainly see increased interest in culture coming from senior leaders in professional services firms, in the work that I do at business schools and some of my own coaching work, and so I think there is definitely a sense of we need to be alert to the importance of culture to performance and, in particular, to attracting talent and retaining talent. So I think there's then often that dilemma of being stuck in this very finite, constraining, dehumanizing model and yet wanting really good people who will help, in an increasingly competitive world, take the organization to the next level. So I think there is definite interest, but also to some extent, a dilemma, because it feels like there aren't really many organizations who are sort of willing to kind of step out of the model.
Cath:It's almost how do we still do this without completely damaging people? It's a little bit like that how do we still control our athletes and we'll still go for medals, but just let's have a little bit less maltreatment of the athletes rather than do you know what. The way to change the high performance culture in sport is actually to have a different vision of why you do sport, to help athletes feel a sense of purpose in what they do and to connect to a greater community, to find a deeper meaning that then means that medal is of lasting value and that then helps them both to perform and to thrive in the process of performing. And so I think some of the professional services world, where they're having these sort of daring to begin lightly to question their models, are at the moment quite a long way from going. Do you know what? We have to rethink our purpose. But ultimately, I think if you genuinely want culture change, that is the route you'd have to go, but that would feel probably too revolutionary for many in this space.
Colin:But make no mistake, expectations of these organisations have changed. The most high profile story was actually in Australia for PwC, who were subject to a government inquiry over a couple of scandals. They buried a report. But also the big one was where certain PwC partners were involved in marketing confidential government plans to combat tax avoidance schemes. Basically, it was found that they compromised ethics. We'll share the links to the reviews and the news stories in it and ironically, they had a value of act with integrity, and so you know.
Colin:Here was an example of a professional services company that said we're a values-based organization and the irony is Peter and UC actually produced some really great research on culture, which I use all the time and call out all the time. But here's a place where they got it wrong and it actually led to almost to the closure of the business. They had to sell the business off, particularly in Canberra, which is the capital of Australia, because people didn't want to work with them anymore In the past. I'm not sure, Cath, that that would have happened In the past. I think the excuses would have been made for them, maybe 10, even as soon as 10 years ago, I think.
Colin:Certainly, in my experience, it really started to change. Post-global financial crisis, where, all of a sudden, we were bringing our children up differently Greed for want of a better word was not good anymore, even though it had been beforehand, and so I still find there's some really old-fashioned approaches and thought processes that that come with culture, and I think that was a great example of hey as a, as a world, we're not prepared to accept. It's like turning a tank around, though. Right, it's going to take a long time, but I think you know, and the point that I made on linkedin at the time, I think, was, maybe the threat to the bottom line is when these guys actually start to take culture seriously, maybe yeah, undoubtedly, and so, yes, those drivers then are around bottom line profit, performance and, as part of that, talent retention and the capacity for individuals to sustain performance through a career.
Cath:Because the mental health issues, I think, are coming much more to the fore.
Cath:I saw a survey from 2019 where it said that sort of one in 15 junior lawyers had suicidal thoughts.
Cath:There are quite a few of these mental health surveys now that various organizations are across the law sector where I've been doing some research, you know are showing really worrying trends that are not going to be good either for individual thriving or for performance.
Cath:So that's again what creates an interest in change. But I think the dilemma is can you sort of put a, can you treat the symptoms you know we're back to the sort of yoga on Thursday lunchtimes or do you address the root cause, which might be then, sort of yoga on Thursday lunchtimes, or do you address the root cause, which might be then, yeah, this kind of billable hour model where you are commodifying time, where you know, as Oliver Berkman and his brilliant book 4,000 Weeks, which I hugely recommend because it really makes you stop and think about how you spend time where he says the logical conclusion is that an hour not sold is automatically an hour wasted, which is perhaps not going to be a healthy or fulfilling approach to life, but that is the conclusion. That's the trap we get in when we're in a model that is defined in this way.
Colin:I haven't read that book, oliver Bergman, so I'll definitely look out for that and we'll pop a link to that in the action sheet as well. Definitely look out for that and we'll. We'll. We'll pop a link to that in the action sheet as well. So I I captured the key issues as I see them and and for me, some of these are based on my own experience, uh two, of working with organizations in billable and what. What was interesting to me is. What's interesting to me is that whenever we started working with a consulting company it was largely consulting companies, one or two accountants is we took care to actually define the culture of working together first, and you could see that that was alien to them. And this was the early kind of 2009, 8, 9, 10, 11. Every time I worked with a consultant, we built a team with them. So these are the five key issues that we see Now.
Colin:Cath just mentioned the first one, which is increased stress and burnout of employees. I think the expectation on people in billable hour is more and more and more, and I spoke to a Gen Z employee who just resigned from a consulting company. She said it was just too much. She said it had been sold to her by her parents as this really great career opportunity. You meet these people, you play your cards right, you become a partner, and she said it was just too much, the expectation was too great, and so I've increased. Stress and burnout is the first one, and quantity over quality. One of my favorite quotes is from Charles Dickens, who said that the one great principle of the English law is to make business for itself, which is a great example of the billable hour and for senior leaders listening to this. We've all been there for the presentations where the senior partner comes along and he says this is what we're going to do for you. They win the business, we sign the contracts and then all of a sudden, 12 people who all look identical flood the department and they sit together and all of a sudden you're like what are these 12 people actually doing? So quantity over quality it misaligned interests, uh, is the next one.
Colin:I think that often and I used I remember saying this to my boss once I was like we're like train tracks. We run parallel to a point and then all of a sudden there's a set of points and they go off in a direction that we're not going in, and partly that's around maintaining consistency of culture and expectation setting and, you know, ensuring that we stick to what it is that we agreed. And I always used to say that if we have to refer to the contract then we failed Culturally. We fail because, you know, actually going back to the contract then we failed Culturally. We failed because actually going back to the contract, it's kind of the last thing that you ever want to do is say in the contract it serves. But it's a real sign that you've kind of misaligned interests. It discourages collaboration. I think you have to work really, really hard because often in the billable hour, when you're working with billable hour type cultures, they just want to do the thing and they don't want you to peer over the fence. It's like, oh, we'll come back and we'll tell you when we've done it and we'll send you the invoice and then you're like so I think that you know there's there's that you know it really kind of discourages collaboration. But the last thing for me is is that it neglects the non-billable hour activity.
Colin:So the Gen Z person that I spoke to, she said they were very good at induction. She said it's one of the best inductions that they actually ever she could imagine. I think this was only her second job and she said that they took her through the value. She had lunch with her boss, I think you know, and they took great care to talk about all of those things. So I think that's great, she said. But after that there was no investment. She said it was very much a work hard, play hard. You've got to bill the client all of these hours and then we expect you to come drinking with us on a Wednesday, thursday, friday, whenever it was. And she said expect you to come drinking with us on a Wednesday, thursday, friday, whenever it was. And she said you know she didn't drink and that was frowned upon. So I think the non-billable hour activities, things like culture, things like training, so there's very much a case of listen if we're not getting paid for it, we don't do it.
Cath:Yeah, and I've seen that sort of again in interviews and things saying that this model kills community. If we don't feel we belong to a community, a we're not likely to stick around and B we're not going to be doing our best work. It's an intrinsic motivator. It's something that helps us feel we belong to, something that matters. It kills psychological safety because you can't really challenge it. You can't also suggest oh I found a better way to do something, because actually we're not looking for a better way to do something, we're looking for a longer way to do something. So it actually hurts productivity. There's no incentive to do something better and quicker. That feels quite wrong and I would struggle with that in employing. You know, if I was using the services from a company who are incentivized to take as long as possible about what I ask them to do and make it as complicated as possible rather than the opposite. And yeah, it kills performance improvement really as part of that. So I think there is a real challenge in if you're performance focused at some level, you're constraining yourself by having a culture like this. I think sometimes the partnership models that accompany organizations that use this, I see a sort of stagnation in development terms. The younger, the new, junior lawyers, junior accountants they're developed, they go through training program. Then once you become partner, that's it, you've made it and you're no longer developing. And yet that seems crazy. I mean, we believe in sort of lifelong learning and development and surely at that point you have so much influence on an organization as a partner, why wouldn't you keep developing? So there are often some behaviors within these organizations that are counter to performance, counter to thriving, counter to innovation, for sure, and I think that's another driver in the future potentially for doing things differently. These are organizations where AI is going to have a big influence and the things that we're going to be left doing that the AI can't do are going to be around relationship building, innovation, collaboration. So why aren't we valuing and developing those skills now rather than doing the stuff the computers are going to do? So I think AI will potentially also come and disrupt in some ways this field, and that's another reason why I think that people are looking externally and thinking what does need to change here.
Cath:I've been sort of doing some work supporting a brilliant organization called the O-Shaped, who are looking to create more rounded lawyers. And it's actually set up by General Counsel, dan Cain, who, along with many other general counsels, were getting kind of fed up of bringing in kind of law firms to do work but, yeah, not incentivized to simplify stuff, not rounded people. You can have a kind of law firms to do work, but, yeah, not incentivized to simplify stuff, not rounded people. You can have a kind of bigger picture conversation with and actually not what they wanted to, you know, not getting the value that they wanted for the huge amount of money they're being charged. So that's an interesting initiative trying to come in at different levels into organizations, also into law schools, to start thinking about how do we create more rounded people who will be able to manage the complex challenges that we face and with your clients then be a more effective interlocutor than some kind of machine that works in these six-minute increments which when actually there's a bunch of machines kind of queuing up waiting to take your place in a few years. So that's been interesting. There are some initiatives like that that are going on in this space to think differently and there are some leaders interested in that but don't really see fundamental change yet.
Cath:I did want to ask are there some pros, are there advantages? Because I feel we should be thinking in a rounded way ourselves on this podcast, because I feel we should be thinking in a rounded way ourselves on this podcast, from having a billable hour, billable six minute model, and I was searching and sort of challenging and challenging my own brain to think about this, and the only one I could come up with and I did see it pointed out somewhere as well is that maybe it creates a distinction between working and not working. It creates a distinction between working and not working. In a world where we're sort of always on. There's a sense that actually, if you're not billing something, you've finished work is over. Now these are organizations that are famous for kind of really, really long hours. But anyway, I just felt, for the sort of sake of trying to be challenging our own thinking, is there a tiny, tiny benefit there? But I mean, I'm probably outdone by the fact that, yeah, we're not valuing so much of what's happening when we're not billing stuff. But there we go.
Colin:Good for you, Cath. One of us has got to find the balance. Here's me with my list of here's what's broken and here's what's wrong.
Cath:Oh, it's a poor offering, isn't it against that? And yeah, not one that I'm that convinced by either.
Colin:Well, there was a report in the Daily Telegraph newspaper at the start of the year here in the UK and it was talking about a growing number of lawyers of all ages are really opening up now about their struggles within this kind of culture. So you've got some older workers and we'll put a link to the action sheet in the action sheet. Some older workers are starting to question these kind of working on Saturdays, long hours sleeping under desks. Younger workers really thinking their career choices. You know I mentioned I spoke to that one Gen Z workers and you know the report in the Telegraph talked about people quietly crying in office toilets which are commonplace in in the industry. I want a person to talk about hazing people who speak to them rudely and expect to take it on the chair.
Colin:I I would like to call out so I've worked with a couple of kpmg teams. I've worked with one in melbourne. I worked with kpmg international team in london and what was great and that the last one was at the end of last year and there was a real curiosity around culture and what good looks like and I think you know to put a positive frame on this. You know, in an ideal world I'd love to, to change the concept of the billable hour, because I do believe that it does drive a certain kind of behavior. I do, and I've seen that in action hour because I do believe that it does drive a certain kind of behavior. I do and I've seen that in action.
Colin:But that's not to say that it needs to. I think that you know, going forward and one of the realizations these kinds of organizations need to have and there was one law firm that I did a speech for a couple of years ago definitely forward thinking is we want to build a culture that's attractive to people. We want people to work with us because of our culture, not because we're cheap, not because we're efficient, but because of our culture. So I think that you know what billable hour cultures can do is really start to think about what does good look like for us and actually invest the time, the money, the effort, as the teams I worked with the KPMG did, in actually defining what it means for us.
Colin:And yes, I recognize that while you're there for the two days you can't build the client, but it's a good thing. It's a good thing to create psychological safety. It's a good thing to build relationships. It's a good thing to create psychological safety. It's a good thing to build relationships. It's a good thing to understand what it means to trust each other and also to instill a sense of discipline and then be able to project that outwards in a way that's attractive to people that may want to hire you, rather than being something that they want to keep you at arm's length rather than being something that they want to keep you at arm's length.
Cath:So can you still have that if, fundamentally, everything is measured by the billable hours? For me, it is about introducing some different metrics. You've got to value, you've got to reward, you've got to recognize alongside that, and then you have a bit of a clash of metrics coming along. For me it becomes there's a danger, it's too superficial. If this is still what you're rewarding from is just the billable stuff too superficial If this is still what you're rewarding from is just the billable stuff. You've got to have a broader set of metrics now that you really value in every way that your organization shows value for its employees. So for me, you have to start unpicking this or at least developing a more complex set of performance metrics.
Colin:Yeah, I agree, and I think we're starting to see that a little bit Cath, in that people are asking you know, how easy are we to do business with? How good are we to do business with? I think in the past what you found was, because culture was such a black box, we didn't really care too much about who we were working with. What we cared about was the outputs and the cost. But I think now no organization wants to work with a toxic culture. If there's even the smallest chance that the culture that you're working with can find itself in the media, people will.
Colin:This just happened with PwC in Australia. People will distance themselves from you immediately. And so I, you know, like I said, I really want to believe that it's possible. But you're right, it does require a different set of metrics, you know, for them to do regular pulse checks on their own culture, to make sure that these are safe spaces for people to work, that we don't get to the point where I think you said it was one in 15 people had suicidal thoughts. Yeah, I mean, oh, that's awful, and they're the kinds of questions you want to be asking internally and then externally how good are we to do business with how trusted do we feel, these kinds of things. So, yes, you're going to still bill in a particular way, but that doesn't mean that you compromise the culture and the relationship you have with the client.
Cath:Yeah, I agree with that. So it's changing the metrics is going to be an important part of this, isn't it? And starting to unpick that and then create some perhaps more qualitative metrics as well. I do wonder, with the general global downsizing of those that remain and those that are, you know, now there's perhaps more of a buyer's market for management consultants. Then people will get more choosy about the experience, and that's definitely another driver for change. So I think perhaps we might see some greater change in that part of it. You know, for law firms, potentially. That's the you know's the end of the spectrum where this model is hardest to turn over. Though the global war for talent maybe remains a big, I hope that remains a driver for change culture.
Colin:I think these kind of cultures are always going to be a magnet for certain people. Cathy and I were talking about this before we started.
Cath:Paranoid, insecure overachievers.
Colin:Yeah, that's what you said. Yeah, they're always going to be a magnet for a certain kind of people, but also think that there's a generation of young adults coming into the workforce who've heard their parents complain about billable hour cultures and won't want any part of that as well, and so I think that, yeah, I think that there's going to be a real shift in the perception of these kind of places to work.
Cath:The question is what's the proportion that shift? Is it enough that are going to shift to challenge this, or will they still find that actually there are quite a lot of people who are? You know, I mean, the starting salaries of lawyers are really eye-wateringly large in London, and then in America even more so, and this is something that is in the press now. So it is obviously something people are going oh, what's going on here, which maybe is helpful. Nevertheless, those starting salaries are going up and I don't think that there isn't a lack of people who want to do it. So there's a sort of interesting question about what's the tipping point. How many people need to shift? How many of the next generation? Will it be the generation after, or will it be enlightened partners? At what point could we get that kind of deeper shift? Or is it something else that happens even in, whether it's through legislation or through government changes or something like that, that will accelerate change in this area?
Colin:Yeah, I think it's going to be, you know, toxic, as we saw with the example in Australia. Toxic culture in the media, loss of business culture, crises lead into a complete rethink. You would like to hope in the way that we do business. It's, you know, like we said at the start, I don't think it's something that we can solve, but I think it's important that we talk about. So what might be the takeaways?
Cath:Yeah. So in terms of actions, I think it's about factoring in that people and organizations want to work with companies that treat their people the right way. So are you leading an organization, are you leading a team? Are you a colleague as part of the team, where your culture is one that your clients, your external stakeholders, you want to work with you? That's quite an interesting measure, I think, to start thinking what's that going to look like? What are our ambitions? That mean other companies are going to want to work with us.
Colin:Yeah, I think something to get curious about and I mentioned this earlier is you know, kind of, what does vibrant culture look like in a, you know, in a billable hour company? I think that's something that you know, people you know, like I mentioned with the team that I work with, they're really fascinated about dynamics, actually fascinated about external perception as well, which plays into that metric. So I think you know, if you work in that kind of environment, well, you know what does vibrant culture look like for you.
Cath:And lastly, uncover what's the impact on ethics of the pursuit of profit. The pursuit of the billable hour at all costs. What happens to the ethics in those organizations if you're part of that? The pursuit of the billable hour at all costs what happens to the ethics in those organisations if you're part of that? Or if you know other people you've got friends who work in there get curious to uncover whether ethics are being compromised. What's the impact on ethics of these organisations?
Colin:I think that's a really important point actually, Cath, because I think that that's where the ethics, that's the thing that affects the bottom line, and I think that they're the kinds of things if you work in these kind of cultures. They're the kind of questions to be acting internally. What do we know that we're doing that, if it came out, would completely compromise our bottom line. And I think lots of organizations talk about ethics but often it's lip service.
Cath:Yeah, and another fascinating topic yeah, a tricky one, important one, and one that maybe will feel controversial, but hopefully an interesting one for us to delve into together. Excellent Thanks, ken. Thanks for listening to today's Inside Out Culture.
Colin:Podcast. Please remember to like, subscribe and, of course, share with others who you think may be interested.
