Planning Fallacy and Bad Estimates

It turns out that lawyers are human after all – at least with respect to their all too human inability to plan appropriately.  Heidi Grant Halvorson recently published an interesting post on the planning fallacy, which is what psychologists call the inability to estimate accurately how much time an activity can take.  Halvorson’s review of the research in this area suggests several reasons (or biases) that lead to our bad estimates:

  • “First, we routinely fail to consider our own past experiences while planning.”
  • “Second, we ignore the very real possibility that things won’t go as planned – our future plans tend to be `best-case scenarios.'”
  • “Lastly, we don’t think about all the steps or subcomponents that make up the task, and consider how long each part of the task will take.”

When lawyers work in a world that rewards according to time spent, it becomes imperative that we understand better exactly how much time an activity takes.  This means that we have to create systems to counteract the effects of the biases mentioned above.  Chief among these is keeping track of the components of every task, as well as the time actually spent in the past on those components.  If you think this is something you can put off, consider that as we shift to alternative billing arrangements, bad estimates come out of the lawyer’s pocket rather than the client’s pocket.


Related reading:

[Photo Credit:  American Virus]

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