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In-house counsel riled over billable hour
A movement away from billable hours in the US is gathering momentum as an increasing number of lawyers express concerns over the traditional model.
Olivia Collings
A movement away from billable hours in the US is gathering momentum as an increasing number of lawyers express concerns over the traditional model.
The topic dominated discussions at the Georgia chapter of the Association of Corporate Counsel monthly meeting last week, when in-house counsel and lawyers from boutique firms discussed concerns about rates, hours billed, burnout, turnover and dissatisfaction with work at big law firms.
Susan Hackett, general counsel at the Washington, D.C.-based corporate counsel association, said the big law firm model focuses on hours billed rather than efficiency and results. "I don't think anyone is saying law firms can't provide efficiency, but their business model is structured so that inefficiency is encouraged,” she said in the Fulton County Daily Report.
Hackett urged the corporate counsel present to use the economic crisis combined with growing demand for alternative billing arrangements as an opportunity to make changes in their outside counsel choices.
Boutique law firms are often leaner, more efficient and more stable than their big counterparts, members of the association said during the even, adding that boutiques are often debt-free.
"Alternative billing arrangements have the ability to transform the legal landscape by better aligning the goals of the firm with the goals of the client," a pamphlet distributed at the meeting, The ACC Value Challenge - Reconnecting Value to Costs: Delivering Value through the Boutique Law Firm Business Model, said.
Alternative billing arrangements would also include risk-sharing between firms and their clients, the documents stated. “Law firms should be able to manage pricing and scope the way other service providers do, and that the more alternative arrangements are used, the better both firms and corporate counsel will get at doing so.”
Communication was another issue raised at the meeting, H. Lamar Mixson at litigation firm Bondurant, Mixson & Elmore, and president of the Georgia chapter of the International Network of Boutique Law Firms and his fellow panelist said communication between firms and clients, in-house counsel and outside counsel was another key to improving value. That is, if a firm will be charging more at the end of the day, they need to communicate this to the client or in-house counsel.
In Australia there is a similar momentum for change, with firms such as Optim Legal, Advent Legal and Built Environment Legal, a practice wholly owned by the Association of Construction Engineers Australia, already offering different models in payment for their legal services.
While momentum for a new fee paying system has been building for some time, it appears the global financial crisis might be helping it along, as clients look for great accountability from their suppliers, including their lawyers.
