Has the Billable Hour Taken Another Hit?

Posted on February 17, 2009 by Gary A. Bresee

A month ago I reported on Scott Turow's article, the "Billable Hour Must Die."  Well, apparently, the New York Times now agrees.  In "The Billable Hour Giving Ground at Law Firms," Jonathan Glater reports how the tough economic times are creating a shift away from the old standby billable hour.  Examples given of alternative fee arrangements include:

  • flat fees for business transactions,
  • success fees for positive results,
  • flat fees for mortgage closings,
  • contingency fees, 
  • monthly retainers for litigation clients, and even 
  • fixed fees for each stage of a particular piece of litigation.

The discussion is certainly a healthy one, particularly for attorneys who may be trying to compete for clients by creating a real difference between them and their competitors.  I do not believe the billable hour will go by way of the dinosaurs, but perhaps we will see a changing competitive landscape, where firms may be forced to alter their way of thinking in order to compete in the marketplace.

Have you proposed any alternative billing arrangements recently? 

 

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Scott Turow Believes The Billable Hour Must Die!

Posted on January 14, 2009 by Gary A. Bresee

Scott Turow, famous novelist and one-time full time lawyer, wrote an article for the American Bar Journal, "The Billable Hour Must Die."  Catchy title.  Mr. Turow asks the burning question, if associates were required to bill 1,750 to 1,800 hours in 1986, but are now being pressured to bill 2,000 to 2,200 hours, "how can anyone balance these hours against other aspects of life?"   

This debate is nothing new, of course.  Professor William Roth commented on this issue as long ago as 1996 in his book, "The Honest Hour: The Ethics of Time Based Billing by Attorneys."

Like many things in life, it's easy to criticize the current way of doing things.  It's much more difficult to come up with an alternative solution. 

  • How do you use a flat fee agreement when your client is involved in litigation, and the opposing party is objecting to every discovery request that you propound?  
  • How do you use the concepts of a contingency fee agreement when you represent the defendant?
  • What are the ethical pitfalls to avoid in using alternative billing arrangements?

The billable hour is not an easy concept for the legal profession to scrap, or even minimize, but it will remain an interesting topic, particularly during the economic times in which we currently find ourselves. 

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