Law Firms’ Zeal for Realization Undermines Client Relationships

It’s December, and the calls are beginning. Law firm management is pushing partners to collect—not just on current bills, but on invoices that aren’t even due until January. And one day makes all the difference. Revenue collected by Dec. 31 counts toward this year’s profits-per-partner and individual realization rates. The revenue collected as of Jan. 1 belongs to a new fiscal year.

But this year-end collection push creates a misalignment: Firm management is maximizing this year’s revenue metrics, while relationship partners are trying to build trust that lasts years.

Law firm metrics exalt realization rates—the percentage of billed time that actually gets collected. Partners are evaluated on them. Billing departments are structured around them. Yet they drive behavior that undermines the very relationships they’re meant to capture.

The Realization Trap

Earlier this year, we received a bill for $250. It was just two time entries—each for six minutes of work performed more than six months earlier. Almost certainly, two lawyers entered time late, the entries wound through the firm’s billing system, and the billing department automatically sent an invoice.

Any partner would recognize that billing two stale 0.1 entries damages the relationship far more than $250 could justify. But no one made that judgment. The billing department doesn’t think in terms of relationships. It processes entries and maximizes realization.

Firms have deliberately separated revenue-generating lawyers from the mechanics of billing. The logic is plain: Partners aren’t trained as administrators, and billing isn’t billable time. The result is elaborate billing departments that generate and collect invoices with minimal partner oversight. At its most efficient, the system delivers realization with no relationship context.

But What About the ‘Human in the Loop’?

The irony is that when it comes to legal automation—the current push to deploy legal artificial intelligence tools—law firms champion keeping “a human in the loop.” They rightly emphasize the essential role of lawyer engagement to preserve judgment, ensure quality, and catch hallucinations.

Yet when it comes to billing—one of the most relationship-sensitive aspects of any engagement—they’ve systematically eliminated the human in the loop.

What I Came to Learn as a Partner

Billing automation is really a manifestation of firms’ emphasis on realization. When I once suggested to outside counsel that a bill should be adjusted, they didn’t defend the value or legitimacy of the work. They explained, matter-of-factly, that any write-down would hurt their realization. The metric had become the goal, divorced from the relationship.

I understand both sides. I spent years as a billing partner in Big Law, where my compensation was driven by realization. But I also made judgment calls—writing down bills when I thought it better reflected the value we delivered. If we pursued strategic research that didn’t bear fruit, I’d share skin in the game and tell the client why.

I also learned through mistakes. One December, my management committee pressed me to collect early on a substantial bill. After “just checking in” one too many times, the deputy general counsel said, with a chill: “Eric, I’ve done everything I can. When it gets paid is now outside my control.” But my firm wanted me to do everything but supervise the wire transfer.

When the wire came through just before 5:00 p.m. on Dec. 31, my management committee thanked me enthusiastically. But the payment came at a cost: What felt like responsible firm citizenship had introduced an element of corrosion into a trusted-adviser relationship. That’s the tension relationship partners face every December—firm management celebrates the revenue, but you carry the relationship into the new year and beyond.

Some firms do better. They send cover letters not only showing adjustments, but explaining the judgment behind them. While we review all bills carefully, these tend to get approved more quickly because we know a partner examined them through the lens of our relationship. The firm that sends six-month-old bills for 0.1 increments? We pore over every word.

Many firms anticipate this scrutiny, and expressly discourage voluntary write-downs. They reason that clients will push back anyway, so why give away revenue? But this misreads the client perspective. Proactive write-downs often preempt pushback and build trust. By contrast, bills that arrive without partner judgment invite—no, necessitate—scrutiny, which reinforces the firm’s belief that clients are adversarial. It’s a vicious cycle that reduces the relationship to a fee-for-services commercial arrangement.

The ‘Vendorization’ of Law Firm Relationships

Clients bemoan rates, yes—but we also prize our strongest outside counsel relationships. We want you paid fairly and on time for the value you deliver. When I became general counsel, a legal operations leader at one of my former clients walked me through their billing policies. After explaining penalties for late bills, he added, almost offhandedly: “But of course we really don’t want to impose penalties—we want to pay our law firms and have a healthy relationship.”

Yet law firm billing departments often undermine those relationships, billing and collecting like vendors processing transactions. Law firm partners, in turn, resent being treated like vendors. But firms created this problem—and not through rates alone.

By divorcing lawyers from billing, firms “vendorized” the relationship. They forgot a core truth: What you bill, how you bill, and when you bill aren’t administrative details. They’re inherent in the relationship. Firms may have separated the billing process from lawyers, but that process remains integral to clients’ experience working with firms.

Moreover, the drive toward AI automation raises the stakes even higher. As AI tools enable in-house teams to do more without outside counsel and firms themselves introduce AI efficiencies, the human in the loop—an engaged partner who exercises judgment—becomes even more important. In the emerging AI era, automating billing may become a missed opportunity to humanize an increasingly fragmented relationship.

Reflective, Not Reflexive

As custodians of a client relationship, it’s essential that billing partners understand the nature of invoices and how clients experience them. Bills aren’t accounting documents—they’re expressions of the professional relationship.

Seeing billing as relational means billing reflectively, not reflexively. Do the descriptions communicate valuable legal work? Are they clear and informative? Beyond rate discounts, should specific portions be adjusted—and if so, why?

That kind of judgment sends a fundamental signal. It says you’re paying attention. It says the relationship matters more than realizing every 0.1 of time.

What December Reveals

We manage what we measure. Law firms measure realization and get behavior that optimizes it. In a better world, firms would balance realization with relationship health—tracking repeat engagements, matter complexity, client trust. Some management committees certainly try, but these factors are difficult to quantify, harder to trace in large firms, and easily overridden when year-end revenue targets loom. For now, the burden falls on relationship partners.

Partners who treat billing as a relationship mechanism build trust that compounds. Those who treat it as a revenue-maximizing tool optimize this year’s numbers while eroding future relationships.

As December unfolds, law firm management will continue calling to maximize total collections. But as partners calculate their year-end realization, there is another calculus: the realization that this December’s collections won’t matter if the client isn’t calling next December.

Columnist Eric Dodson Greenberg is executive vice president, general counsel, and corporate secretary of Cox Media Group. Eric writes about leadership, legal operations, and the intersection of law and AI.