Contextualizing the Billable Hours Problem

One of the things I like to show investors when I’m contextualizing the massive opportunity in automating billable hours using AI is a real world fee statement from the Bankruptcy Court.

Bankruptcy cases are public record accessible by anyone. Which means anybody can access the docket to see how big the problem is.

Until recently, I hadn’t even noticed the following gem from Kirkland & Ellis’s fee application related to its work on the Bed Bath & Beyond bankruptcy cases (a deal I worked on):

K&E is seeking compensation with respect to (i) the approximately 139.70 hours and $130,830.50 in fees spent reviewing or revising time records and preparing, reviewing, and revising invoices; and (ii) the approximately 219.20 hours and $213,312.00 in fees spent reviewing time records to redact privileged or confidential information

This is ludicrous. Spending over a quarter of a million dollars revising time entries on a single deal is part of why I ultimately had to exit professional services.

I’d love to have Kirkland & Ellis as a client. But we aren’t there yet. Product-wise, we have to crawl (service independents and freelancers) before we can walk (service SMBs with under 250 employees) before we can run (service large enterprises and AmLaw 100).

The journey of 1,000 miles begins with a single step. They say if you want to move mountains tomorrow, you have to lift stones today.

Stones we lifted:

• We did some coding and made our algorithm better. We are working on a quantitative statistical measure of how good our timesheets are. This new statistical measure is going to be one of the key metrics we track.
• Met with a few friends of the firm in the PR world and aligned on strategy. While we decided that PR is not a good use of our time at this stage in our lifecycle, we did learn that PR firms struggle quite a bit with time tracking and got a few new leads.
• Kicked off with our Techstars mentors. We are very much looking forward to working with all of them in the coming days and weeks.

The competition this week is as fierce as it was last week. Maybe more so. We need dev time. Our own and eventually others’. Lots and lots. Our growth as a company and our many interesting ideation meetings and customer calls do not decrease the very real number of hours necessary to move stories across the kanban.

We need to prioritize our development projects. We have lots of amazing and transformative ideas and only two developers shipping product (Taylor and myself who also happen to also be executives). The competition between developing features and running the business is the central tension of early-stage startups. We embrace it.