Law Firms are a Business
Law firms exist to make a profit. From the perspective of business, they are a professional service organization, providing legal services on an hourly basis. With few exceptions, law firms are for profit organizations, organized as partnerships; their revenue model is the billable hour and they operate in a hierarchical model of billable timekeepers that include paraprofessional staff, associates, and partners.
Like all businesses, firms have management, support staff, junior personnel, senior personnel, etc. Senior employees delegate work and nurture the learning experience of junior personnel, grooming them for greater responsibility. These supervisory activities are typical of any business.

As all businesses do, firms also carry overhead (general and administrative expenses) – facilities, employee benefits, support staff, etc. Combined with the cost of the billable timekeeper and desired profit, the firm arrives at a rate structure for their paraprofessional staff, associates, and partners.

Firm invoices, similar to all professional service invoices whereby individuals bill by the hour, are comprised of two parts: services and expenses. Expenses are the reimbursable costs firms incur in the performance of their work: copying fees, travel expenses, foreign associates, expert services, etc. Services are the tasks and actions of the timekeeper. Timekeeper’s track their activities and time, determining whether an activity is to be billed and for what amount of time. Firm policy influences timekeeper’s decisions on how they track their time.