Legal Research

"The Billable Hour: How Sick Is It?"

This post was written by Jim Hassett: "The failure of the billable hour to die is back in the news. 

In a recent AmLaw Daily post entitled The Billable Hour Endures, former Kirkland & Ellis partner Steven Harper argued that, "Regularly over the past 20 years, optimists have declared [the billable hour's] imminent demise...yet it survives because it has powerful defenders, including the U.S. Supreme Court's conservative five-man majority." 

Harper listed several reasons that the billable hour remains strong, but it was the Supreme Court reference that got the blogosphere buzzing.  He described an April 2010 US Supreme Court ruling that addresses how, "attorneys fees [are awarded] under the federal statute permitting winning plaintiffs to recover from the losers."  The court's "lodestar method" is based upon multiplying hours worked by the hourly fee.  The implication is that, "lawyers maximizing their chances for court approval of their fees will adhere to hourly billing. Innovators experiment at their peril because, depending on the type of matter, they risk not getting paid."

Whenever a post appears that argues in favor of the billable hour, lawyers and consultants rush from all sides to add their support.  This is the message that lawyers want to hear: "The way you've worked for your entire career is the best way to meet client needs.  You don't have to change a thing.  Just keep billing hourly, and when the economy improves you'll make as much as ever.  Maybe more." 

In every profession, sellers love the billable hour, because it puts all the risk on the buyer side.  Believe me, if I could sell all of my company's services on an hourly basis, I would switch over in a heartbeat.  But I'm stuck with fixed price work, because I sell to lawyers, and they hate buying services by the hour.  They know better..."

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Source: Legal Business Development, 8 September 2010, reproduced with permission of the author.

Full post as published by Stark County Law Library Blawg on September 14, 2010 (boomark / email).