A little off topic – I’ve been asked to speak at an upcoming CLE program at Seattle University Law School entitled "The Billable Hour: An Examination of Compensation." For those responsible for legal budgets (whether an in-house lawyer managing a budget or an outside lawyer like myself who is working within a budget), this promises to be a provocative conversation. According to the SU Law School online flyer:
"there has been a growing concern that the demands of increased billable hours [are] having unintended consequences and compromising the health and well-being of lawyers and the communities they service. At the same time, time-based billing practices can raise ethical questions and create perverse disincentives."
My own take, and I’m looking forward to what others think, is that lawyers and clients should regularly assess how they measure the value of their relationship. The billable hour is one of many available "tools" and continues to be among the most viable and ethical. Problems arise when lawyers and clients rely on the hourly billing format in a vacuum.
For example, an hourly billing arrangment without an agreed budget frequently leads to disintegration of client-lawyer relationships. Similarly, an hourly billing arrangment without agreement by the lawyer and the client about WHO is doing the billing leads to problems.
Outside lawyers and firms also shouldn’t treat the hourly billing arrangement as a religon. For some clients and projects, straight hourly billing may not make sense. Other arrangments such as flat-fee billing, incentive billing, blended rates, etc. may make more sense for both the client and law firm.