COVID-19 Downturn Likely Won't Impact Health of Law Firm Billable Hour

But why? The simplest answer may be tradition. Both law firms and corporate legal departments have each built up a significant portion of their infrastructure around the billable hour. Corporate legal, for example, has invested in bill review machines and other micromanagement models to help keep costs down. Law firms, meanwhile, rely on billable hours to help measure attorney productivity.

However, the financial stress placed on businesses by COVID-19 may leave some legal departments eager to pursue fixed rates that leave less of a question mark dangling over the budget.

"In-house legal departments are definitely going to be asking the questions of outside counsel as far as what can you make a little more efficient, what can we do to keep things a little bit more risk avoidant. And frankly the word that I hear all the time from in-house legal is 'predictability,'" says Brett Burney of Burney Consultants.

Tech may be giving legal departments the leverage — and hard data — they need to actually make progress with those requests. Jason Brennan, president of the Americas at Luminance, points to the growing use of matter management systems and billing tools inside corporate legal departments.

"It's a lot easier for folks to get a benchmark of what things should cost, and personally I've seen that flow down into tasks. You break down larger legal tasks into things like document review and contract review, and certainly with some of those tasks you see more quickly entering the sphere of a per document or fixed fee arrangement," Brennan says.

Corporate clients may not be the only ones applying pressure to law firms around the billable hour. People whose pockets have been hurt by the pandemic could also be turning in the direction of technology to satisfy legal needs brought on by COVID-19.

For example, SixFifty released a product last month specifically geared toward people impacted by the virus who can't afford a lawyer. The free tool, called Hello Lender, helps homeowners draft requests to their loan servicer to delay paying their mortgage for six months under the CARES Act. According to Parker, it's received more uses than any other tool SixFifty has built.

"Those [users] just by necessity are going to use us instead of a lawyer because they have no money. So as budgetary constraints kick in for people and for businesses, I think that they will be open to technology services that can fill that gap," Parker says.

Still, he's not convinced it will be enough to eliminate the billable hour. Burney agrees, pointing to high-level and complex legal work that will more often than not call for the use of a law firm. "There's no way to kill the billable hour. In this profession it's never going to go 100% away. But this [pandemic] has thrown a spotlight on it," he says.

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Frank Ready is a reporter on the tech desk at ALM Media. He can be reached at [email protected].