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If I’m thinking about the client, for example thinking about them spontaneously combusting, it’s billable
OP, in regards to your example, if you did the work, it does not matter if your manager later changed his mind. It’s his mistake, not yours. Those hours are legally billable and to not bill them goes against firm policy.
However, we all know that things are not exactly that simple in the great game of office politics. Your manager may not be happy with you for billing those hours, but if you want to be morally and legally in the right, bill those hours. Be the change we want to see in the world.
For example, if my manager told me to do a task that took me 5 hours and then changed his mind afterwards, does that mean I eat the 5 billable hours? What about internal team meetings discussing strategy, planning how to complete a deliverable and telling subs what to do?
If it’s related to consulting, You create value for a client and your company receives emoluments to keep paying your salary
Anything ... I mean anything that has any relevance to job at hand is billable time. Includes time spent thinking hard about the “problem” on the toilet.
Seriously though, if everyone billed actual hours worked it would stop protecting shitty managers. That’s why they are paid more than associates—they are expected to be able to do their job properly and not just be there to improve margin by getting others to lie on their time sheets.
Tldr; Bill hours worked, let somebody else figure out what to bill the client.