Sunday, July 01, 2007
The End of the Billable Hour?
This recent Denver Post article details firms like Beatty & Wozniak who are eliminating the billable hour in favor of flat fee arrangements and even corporate contingency fee arrangements. The ABA reports that the trend is growing, and even HRO has had an alternative fee schedule in place for years. That said, I have a feeling it probably won't spread too quickly to the other 17th Streeters anytime soon, but a guy can dream, right?
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3 comments:
I talked to a friend who works at Hogan & Hartson in Denver. He thought this kind of fee arrangement would revolutionize the legal world. I think it's provocative and will be interesting to follow.
Apparently, attorneys working for Bartlit Beck, the boutique firm mentioned at the end of the article, work the equivalent of 2,500 - 3,000 billable hours a year. THAT IS INSANE! While they don't have to count their 0.2s and .3s, they have so much to lose that they do nothing but work...
statutory-style work often is done for a flat fee- i.e. landlord tenant evictions; same with trusts, etc. I know trusts are often charged via a percentage of the value of the property & money in the trust. I suspect this sort of billing scheme is more palatable to individual people and small companies.
p.s. if anybody is getting bored with topics, send an email to me, rice, or any other admins. We're happy to post on behalf of others-
According to rule 1.5 (rules of professional conduct), there doesn't seem to be anything unethical with contingent fee arrangements except for 1.5(d) matters.
But it seems to me, that these arrangements could lead to an intertwining of interests with a client, and although almost any conflict can be excused with informed consent, when we're talking about multi-million dollar fees, I think we're approaching a dangerous zone (1.7(a)(2)).
BTW, as much as I dislike having to track & report my time, I think it's a useful metric for project management purposes--many other professions track time for such purposes.
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