Billable Hours: Should Lawyers Still Get Paid Hourly?

Are you ready to do away with billable hours?

Some are calling for attorneys to stop billing altogether and opt for "value billing."

Value billing is being looked at very carefully, as the economy drives law firms to consider changing the way they charge clients, according to an ABA discussion Atlanta, reports ABANow.com.

Value billing can be structured as fixed fees, flat fees or success fees. It can even be a flat rate charged for work over a whole year. Though billing by the hour may be eliminated, firms will probably still track overall hours and work conducted, to determine overall efficiency.

The reason for the change in billing structure is so that clients will have more security in knowing how much the fee will be. And lawyers will be more satisfied not having to figure their time out quarterly or by 10-minute time allotments.

For ABA President Stephen N. Zack, it's getting back to good ole-fashioned lawyering. "I remember when lawyers billed for legal services rendered. Lawyers had relationships with clients: If there was an issue with the bill, we'd sit down and talk about it."

Joseph K. West, associate general counsel of Walmart, noted, "Both in-house and outside counsel hate the billable hour. It hurts relationships."

"We became lawyers because we're passionate about justice, we want to be liked and respected, and we enjoy winning," said David Boies, managing partner with Boies, Schiller & Flexner LLP. "Value billing feeds all of those reasons."

Last year, Clifford Chance in London stopped conditioning associate bonuses on a minimum billable-hours basis and is switching to a "balanced and flexible bonus scheme," reports the ABA Journal. Rather than reward associates solely by the amount of hours they bill, the firm takes into account factors such as effort, skills, client satisfaction, teamwork and community work.

Related Resources:

• Questioning the Value of the Billable Hour (ABANow.org)
• The Endangered Billable Hour (FindLaw.com)
• Alternative Fee Arrangements Becoming More Popular (FindLaw.com)