Corporate & Securities Law

The Billable Hour as a Driveway Moment

By John Wallbillich

We’ve seen the Billable Hour conundrum in legal publications for decades, returning like a boomerang that we thought finally escaped our grasp.

Then a few months ago you find the Billable Hour appearing in the business press. Hmmm, interesting.

But when Mrs. Wired GC hears it on the radio last Friday, it means (a) things are changing or (b) an extremely slow news day at NPR. I, for one, would have driven into a ditch.

The four minute audio is available here.

There are some excellent sound bites, including a sort of point-counterpoint between Nicole Auerbach from Valorem Law Group and Pamela Rothenberg from Womble Carlyle.

Paraphrasing, for the Flash media player-impaired:

>>Ms. Auerbach:

In forming Valorem, clients told us the #1 issue for them was cost control, knowing what legal matters will cost on the front end.

>>Ms. Rothenberg:

It’s not in the realm of possibility that the Billable Hour will just go away; you’d have to have a tsunami of change for every firm to throw it out. The important thing to focus on is what clients need.

There’s truth in both statements, but if I were scoring this round I’d say advantage Auerbach. Although if one of Womble’s clients wants to go off the hourly reservation, I assume they’d oblige.

I think there’s always been a problem of definitions in the Billable Hour debate. Here are two key ones for me:

– (a) “Billable Hour” is a regime, characterized by most attorneys charging by the hour, with no alternative control mechanisms save for the individual lawyer’s sense of ethics and the relationship partner’s sense of reasonableness.

– (b) “Hourly Billing” is simple math, a way of calculating time on a matter and can in fact be part of many alternative fee arrangements, just not the default end result.

So even if (a) sinks under its own weight, (b) will likely always sail on, sailor.

But I’d have someone on lookout for that tsunami, just in case. It could be a sign of regime change.

Full post as published by The Wired GC on November 25, 2008 (boomark / email).