Billable Hours: Targets by Firm Size and How They Are Really Counted

Last updated: 24 October 2026. This guide uses Clio’s 2025 Legal Trends Report, NALP research on associate hours, firm bonus policies reported by Bloomberg Law, ABA ethics guidance and the rules of the Solicitors Regulation Authority (SRA) in England and Wales. It is general information, not legal advice.

Short answer: A billable hour is an hour of a lawyer’s time that can be charged to a client, usually recorded in tenths of an hour (six-minute units). Large US firms commonly expect about 1,800 to 2,000 billable hours a year, with some tying bonuses to 2,000. Clio’s 2025 data shows the average lawyer bills only about 38% of an eight-hour day.

Key takeaways

• Most firms record time in 0.1-hour units, so a two-minute email is usually billed as six minutes. In England and Wales, routine letters and emails are allowed on a unit basis of 6 minutes each when costs are assessed.
• Large US firms set the highest targets. A&O Shearman told US associates in 2024 that bonuses require 2,000 billable hours, and King & Spalding asks for 2,400 “productive” hours, of which at least 1,950 must be billable.
• Recorded time is not the same as money collected. Clio’s 2025 report puts average utilisation at 38%, realisation at 88% and collection at 93%.
• Ethics rules apply to every hour. A lawyer billing hourly may not charge for hours not actually worked, and ABA Formal Opinion 512 says AI-driven time savings cannot be billed as if the work took longer.

What is a billable hour?

A billable hour is time a lawyer spends on work for a client that the client can be charged for under the engagement terms. Drafting a contract, reviewing documents, attending a hearing, researching a point of law and taking a client call are typical billable tasks. The client pays that time at the lawyer’s hourly rate, which usually rises with seniority.

The billable hour is the main pricing unit at most law firms in the US and the UK, and it is also the main way firms measure associate output. Firms use hours to set budgets, price matters, decide bonuses and, in many cases, decide who makes partner. That double role, as both a price and a performance measure, is why the topic matters so much for anyone starting a legal career. For how hours connect to pay, see our guides to the Cravath scale and how much lawyers make.

How is billable time recorded?

Most firms record time in tenths of an hour. Each 0.1 equals six minutes, so 0.1 is up to six minutes, 0.2 is up to 12 minutes, 0.5 is 30 minutes and so on. A short call that takes three minutes is normally entered as 0.1. Each entry also carries a narrative, a short description of what was done, which the client sees on the bill.

The six-minute unit also appears in English costs practice. The Law Society’s practice advice says that when costs are assessed, routine letters out and emails out are generally allowed “on a unit basis of 6 minutes each”, and that this unit covers reading the routine correspondence that comes in, as explained in its note on charging for routine communications.

Some firms bill in 15-minute units instead, and engagement letters with sophisticated clients increasingly specify how time must be recorded. Corporate clients often publish outside counsel billing guidelines that ban “block billing” (one entry covering several tasks), cap the hours they will pay for junior lawyers, or refuse to pay for administrative tasks.

What are typical billable hour targets by firm size?

There is no industry standard, and few firms publish their targets. The most systematic public data comes from NALP, the US association for legal career professionals. Its 2016 analysis, based on the 2015 to 2016 NALP Directory of Legal Employers, found an average billable hour requirement of 1,892 hours a year across reporting offices. The figures are older than we would like, but they remain the most complete published breakdown by firm size.

Bloomberg Law, reporting A&O Shearman’s 2,000-hour policy, noted that many firms require between 1,800 and 2,000 billable hours for bonuses. Hours worked are always higher than hours billed. NALP found that in 2014 associates at firms of more than 700 lawyers averaged 2,199 hours worked but 1,873 billable hours, because training, internal meetings, pitches and administration do not go on a client bill.

At small firms and in solo practice, the constraint is usually the work itself rather than a formal target. Many smaller firms have no fixed number and instead track revenue per lawyer. Moving in-house removes the timesheet altogether, which is one reason it appeals to lawyers leaving private practice; our guide to in-house counsel roles covers that move.

What counts as billable and non-billable work?

Whether a task is billable depends on the engagement letter, the client’s billing guidelines and firm policy, but the broad split is consistent:

• Usually billable: legal research, drafting and reviewing documents, client calls and meetings, negotiations, court appearances, preparing for hearings, due diligence and, often, travel time at an agreed rate.
• Usually non-billable: internal training, business development and pitches, recruiting, administrative tasks, time spent fixing your own errors, and learning a new tool or area of law the client did not ask you to learn.
• Grey areas: pro bono work and some firm initiatives. Many large firms give partial or full credit toward the target for pro bono hours, even though no client pays for them.

Paralegals and trainees also record time, and their hours are billed at lower rates. Our guide to what paralegals do explains where their work fits on a matter.

How much recorded time actually turns into revenue?

Clio, the practice management company, publishes an annual Legal Trends Report based on anonymised data from its users, who are mostly small and midsize firms. The 2025 Legal Trends Report sets out three measures that show how time leaks away between the desk and the bank account:

• Utilisation rate, 38%: the share of an eight-hour working day that is recorded as billable. Clio says this means about five hours of the day go unbilled.
• Realisation rate, 88%: the share of billable time that actually appears on client bills, after write-downs and discounts. Clio says this leaves about 2.6 hours a day on invoices.
• Collection rate, 93%: the share of billed time that clients actually pay. Clio puts this at about 2.4 hours of collected work per day.

These averages come mostly from smaller practices, so they should not be read as Big Law figures. The broader point applies everywhere: a target of 1,900 hours means far more than 1,900 hours in the office once unbilled time, write-offs and unpaid invoices are counted.

How can lawyers record time accurately?

Most billing disputes and lost revenue come from time recorded late, from memory. Practical habits that help:

• Record as you go. Use a running timer or log each task when you switch, rather than rebuilding the day at 7pm. Reconstructed timesheets tend to miss short calls and emails.
• Write narratives the client will understand. “Review and comment on draft share purchase agreement, clauses 4 to 9” is better than “work on SPA”.
• Avoid block billing. List tasks separately with time against each, especially if the client’s guidelines ban block entries.
• Check the client’s billing guidelines before the first entry, including rules on staffing, travel and research time.
• Record non-billable time too. Many firms track it, and it shows the real cost of matters and of firm work such as recruiting.
• Do not pad and do not self-censor heavily. Inflating time is an ethics breach, but routinely cutting legitimate time distorts budgets and leaves the partner, not you, to decide on write-downs.

What do ethics rules say about billing by the hour?

In the US, ABA Model Rule 1.5, which US states have adopted in their own professional conduct rules, often with changes, says a lawyer must not make an agreement for, charge or collect an unreasonable fee. Reasonableness turns on factors including the time and labour required, the novelty and difficulty of the questions, the fee customarily charged locally, the amount involved and results obtained, and the lawyer’s experience. The basis of the fee should be communicated to the client, preferably in writing.

The leading ABA statement on hourly billing is Formal Opinion 93-379 of 3 November 1993. As quoted by the DC Bar in Ethics Opinion 267, it says that “a lawyer who has undertaken to bill on an hourly basis is never justified in charging a client for hours not actually expended”, and that if the lawyer works efficiently, “the economies associated with the result must inure to the benefit of the client.” The opinion also says that over-staffing a project to churn out hours is not properly “earning” a fee, and that bills must give enough detail for the client to understand what is being charged.

In England and Wales, the SRA’s Transparency Rules require firms offering certain services, such as residential conveyancing, uncontested probate, employment tribunal claims and debt recovery up to £100,000, to publish cost information on their websites, including “the basis for your charges, including any hourly rates or fixed fees”. In litigation, the courts publish guideline hourly rates used when costs are assessed; from 1 January 2026 the rate for a London 1 Grade A solicitor with over eight years’ experience is £579.

Will AI end the billable hour?

AI has revived the long debate about hourly billing because it rewards speed, while the billable hour rewards time. The ABA addressed this in Formal Opinion 512 on generative AI, published on 29 July 2024. Its summary gives the example of a lawyer who spends 15 minutes putting information into an AI tool to draft a pleading: the lawyer “may charge for that time as well as for the time necessary to review the resulting draft”, but “should not charge a client to learn about the tool”. In other words, a lawyer billing hourly cannot bill for the hours the task would have taken without AI.

Clio’s 2025 report says firms still bill mainly by the hour but that flat fees are spreading: in 2024, 54% of firms billed both hourly and flat fees and only 41% billed exclusively by the hour. Clio links that shift partly to AI and estimates that up to 74% of billable work could be automated. Large clients have pushed the same way for years; see our report on Microsoft’s plans to move away from the billable hour and our analysis of law firm AI spending.

For now, the billable hour remains the default at most firms, and associate targets have not fallen. What is changing is the work that fills those hours, with more review and judgement and less first-draft drafting. Lawyers who understand utilisation, realisation and pricing are better placed whichever model wins, which is one reason roles in legal operations keep growing.

Frequently asked questions

How many billable hours does a first-year associate need?

At large US firms the common expectation is about 1,800 to 2,000 billable hours a year, and some firms tie bonuses to 2,000. Smaller firms usually expect less, and many have no published target.

What is a 0.1 in legal billing?

A 0.1 is one-tenth of an hour, or six minutes. It is the smallest unit most firms use, so any task taking up to six minutes is normally recorded as 0.1.

How many hours a day is 2,000 billable hours a year?

Spread over about 48 working weeks of five days, 2,000 billable hours is roughly 8.3 billable hours a day. Because not all time is billable, lawyers usually work considerably longer than that.

Do in-house lawyers have billable hours?

No. In-house lawyers are employees of the company and do not bill it for their time. Some legal departments track time internally to manage workload or compare costs with outside counsel, but there is no billing target.

Can a lawyer bill two clients for the same hour?

No. ABA Formal Opinion 93-379 says a lawyer billing hourly may not charge for hours not actually worked, which rules out billing the same time to two clients, for example by charging two clients for one period of travel.

Can lawyers bill for time saved by using AI?

Not on an hourly basis. ABA Formal Opinion 512 says lawyers billing hourly may charge for the time actually spent using and reviewing AI output, but not for time the work would have taken without it, and not for learning the tool.

This article is general information about legal billing practices and professional rules and is not legal advice. Billing rules differ between US states and other jurisdictions, so check your local bar or regulator and your client’s engagement terms.