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Is the Hourly Rate Dead?

BY Ed Poll
October 29, 2009

Beyond the daily headlines of layoffs and reductions in force, the current Recession/”Depression” has made another impact on the legal profession: raising more questions about the viability of the billable hour. The Association of Corporate Counsel's Value Challenge is one of the most prominent examples, as it pursues developing a Value Index that will evaluate law firm billings against corporate clients' perceptions of value and efficiency. However, the skepticism is hardly all on the client side. Lawyers for years have complained of the “billable hour blues” and the necessity of measuring their professional life in time increments. The presiding partner of one of the largest national law firms even suggested in a major business publication that the billable hour should be killed, saying that because of it, “clients feel they have no control. There is no correlation between costs and quality.”

Disingenuous

That may be a true reflection of what some clients feel, but I suspect that many clients are too willing to pass on to the lawyers their lack of control because they themselves refuse to become involved. Paying without question the standard billable hour rate puts all the burden on the shoulders of the lawyer to solve the problem. The client's response becomes a detached, “That's what I'm paying you for.” That is similar to the patient who expects a doctor to provide the cure to a health problem, without the patient changing the unhealthy behavior that contributed to it.

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