Legal Research

The Billable Hour

By jlutz99

A small Boston law firm has banned the billable hour and refuses to take clients who want to pay by the hour.  This is discussed in a recent Boston Globe article.  An excerpt is below:

But the Shepherd Law Group is one of the few firms to voluntarily abandon the billable hour system entirely.

Shepherd, a five-lawyer firm that specializes in employment law, charges its clients a flat annual fee or flat price per task. Clients can call the firm as often as they want to discuss legal issues, although some services, such as training and litigation, cost extra. The new approach helps clients determine legal costs in advance and often prevents legal problems from escalating because clients are no longer reluctant to seek advice out of fear of incurring a hefty bill, said Jay Shepherd, the firm's founder.

"Hourly billing is wrong and it's anti-client," Shepherd said. "There's a disincentive to be efficient since you get paid more if you take longer to finish a matter - even though the client wants it to be finished as fast and efficiently as possible."

The American Bar Association concluded in a 2002 report that hourly billing is at the root of much that is wrong with legal practice: brutal hours, lack of collegiality (since time spent chatting with colleagues is time not spent billing), fraudulent billing, lawyers who intentionally stretch the time it should take to finish a matter, unpredictable costs for clients, little time for friends and family, little time for community service, and a system that rewards lawyers for quantity over quality.

Read the whole article here.

Posted by Jon Lutz

Full post as published by FSU College of Law Library Blog on November 05, 2007 (boomark / email).