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When will the billable hour finally die?


Lawyer have probably been discussing the death of the billable hour since, well, the birth of the billable hour.    The debate continues, and some heavy hitters recently weighed in at an ABA meeting in Atlanta.

Lawyers and their clients are considering new structures such as fixed fees, flat fees and success fees, among others.  So-called value billing, which can mean a flat rate for work for the year, frees lawyers and firms from recording billable hours — though keeping track of overall hours and work conducted may still be ongoing in order to determine overall efficiencies and work done by a lawyer within the firm.

Clients have more security in knowing how much the fee over a certain period will be, and lawyers are also more satisfied because they don’t want to spend their time figuring out quarterly or even 10-minute time allotments of their day.  Value billing also provides an opportunity for firms to gain expertise in areas in which they may not be known as specialists.  As super-litigator David Boies explained, “If a corporation has a flat fee for a year, a firm can go the company and say, ‘You’re already paying us, you might as well use us.’”  Rather than hiring another firm, a corporation may want to give their flat-fee firm a chance to prove what they can offer.  A flat-fee structure can also allow relationships to spread across different corporate departments and to different specialty areas within a firm.

Going one step further, lawyers are also moving towards the “virtual firm”, which makes such alternative arrangements even easier.

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