Well… both, in a way.
Let’s say a young associate interviews at two law firms. In the interview, the partners of each firm tell the young young associate they want him to maintain “160 billable hours per month” at an annual salary of $x, with a bonus of $y for hitting 180 billable hours in any given month.
By “160 billable hours per month” Firm A means “160 booked”. The firm probably has some standard acceptable level of write-offs to calculate acceptable levels of efficiency. Let’s say the firm knows that 1st year associates usually have a 30% write-off rate. So long as the young associate hits 160 booked, keeps the write-offs below 30%, and bills out 112 to clients, then things work out well.
By “160 billable hours per month” Firm B means “160 billed”. The number of hours booked doesn’t mean squat to the firm. The firm expects the associate to book however many hours necessary to hit “160 billed.” Assuming a 30% write-off rate, the associate would need to book 230 hrs/mo to hit the target.
The same expression, “160 billable hours per month,” means two different things to two different firms.
Firm A: 160 booked, 112 billed, associate salary $x, bonus kicks in at 180 hours booked
Firm B: 230 booked, 160 billed, associate salary $x, bonus kicks in at 260 hours booked
Our young associate at Firm A proudly turns in his time, reflecting 160 booked, and all is well.
Our young associate at Firm B proudly turns in his time, reflecting 160 booked, only to get slammed by the partner a couple weeks later for having only 112 billed, 48 billable hours below target. Guess who’s just found out the hard way that he has to work every weekend to meet Firm B’s expectations?
Where would you rather work?