Alternative Billing: An Opportunity?


Rumors of the death of the billable hour are premature. In the early 1990’s, I put together a CLE program entitled “Beyond the Billable Hour” in which a panel of partners and consultants predicted that hourly billing would soon face a serious challenge from fixed fee and incentive fee billing arrangements. Today, as we all know, the billable hour still largely rules the legal profession (particularly at larger firms where the highest billing rates are now exceeding $1000 per hour.)

I still believe, however, that there is a great opportunity out there for a firm/lawyer that can really figure this one out. Corporate clients are not happy with open ended engagements and many are continuing to discuss the issue. For example, Law.Com reported today on a survey in Chicago which showed that 85 percent of in-house counsel are experimenting with alternative fee arrangements.

Associates would certainly be happy if less emphasis were placed on billable hours. After all, does anyone really enjoy tracking his or her time in six minute increments? Does anyone really want their professional contributions measured by the number of hours they have billed to clients (regardless of outcome or of the quality of the work?)

So if you want to make a real contribution to the legal profession, focus your creative energies on devising a fee agreement which places much less emphasis on hourly billing. Clients will thank you, your peers will thank you and you will probably find yourself focusing more on delivering value to your clients rather than simply trying to figure out how to bill an appropriate number of hours for the work you have done.

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