Legal News

In Manifesto, California Bar Prez Calls for Reform of the Billable Hour

By Dan Slater

The destruction brought by billable hours. . . affects not merely the cost and efficiency of our work, but the quality of our profession as a whole. . . . Instead of working 1,700 hours a year as lawyers did in the 1970s, today, new lawyers typically bill around 2,100 hours. Those additional hours come out of two places — evenings and weekends. That means less sleep, fewer outside interests, less commitment to loved ones and the crumbling of a decent life. — Jeff Bleich, President of the California State Bar

If there ever was an “evergreen” question on this beat, it concerns billables. What to do with the billable hour, that temporal building block of many lawyers’ fiscal year? Do we go back to flat rates? Fees for services rendered? But then how would firms value the contributions of their lawyers? There’s got to be a better way, no?

Jeff Bleich (pictured), writing in the California State Bar Journal, says the profession needs to find new billing methods “that will reduce distrust and damage to our client relationships, that will refocus young lawyers on being problem-solvers again, and that will remind us of — rather than distract us from — why we are lawyers in the first place.”

In laying out a short history of lawyer billing methods, Bleich points out, paradoxically, that the old method — in which lawyers (get this!) would use their judgment about much work they put into a matter and bill the client accordingly — was done away with because “management consultants beginning in the 1970s complained that this ‘black box’ lacked accountability and was probably inflating the cost of legal work.”

Summing up the modern paradigm of billables, Bleich quotes the following, which he attributes to Scott Turow:

If you hire me, I promise that my billing system will reward me for solving your problems at the slowest possible pace, with as much duplication of effort as possible, and where I will face economic penalties for exercising any judgment that limits or focuses our work. I will, under this system, have strong incentives to embrace any opportunity to engage in discovery wars where the work is the easiest and the financial rewards are the greatest. And you can be assured that every member of my team will have a real financial inducement to exaggerate the amount of time they devote to every task.

Loyal LB’ers: We know that some firms, mostly smaller ones, have started to embrace alternative-billing methods. But the larger firms have mostly kept their hourly billing practices intact. Give us the report from the front lines. Are firms changing their methods, or is it business as usual?

Full post as published by Law Blog - WSJ.com on December 31, 1969 (boomark / email).