Law Practice Management

The death of the billable hour.

August 16, 2007

Timeandmoney In the August issue of the ABA Journal, Scott Turrow makes a passionate argument for why The Billable Hour Must Die. He’s not alone in thinking that the future of the legal profession cannot be dependent upon the zero sum game of time x dollars. (See the April 4, 2007 post to this blog.) But Turrow asks a new question: Is the billable hour ethical? Turrow cites Rule 1.7 of the ABA Model Rules which provides that “a lawyer shall not represent a client if the representation reflects a concurrent conflict of interest,” which the rule defines as “a significant risk that the representation of one or more clients will be materially limited by . . . a personal interest of the lawyer.” Isn’t there a clear conflict of interest whenever a lawyer’s economic interests favor prolonging representation and the client’s favor shortening the same?

Click here to read Turrow’s entire article at ABAJournal.com

3 Comments

  1. Ron Baker says:

    Hi Nora,
    One small quibble with your post. The question of whehter or not the billable hour is ethical is hardly new. I wrote about it in 1998 in my first book, and Richard Reed’s ABA books questioned its ethics before me.
    There’s no doubt in my mind the billable hour is unethical, and here’s the proof. Would you want every other business to charge by the hour? Why not?
    Because the billable hour misaligns the interests of the professional and the client, period. The empirical evidence is overwhelming for this.
    The billable hour must die, indeed.
    Regards,
    Ron Baker, Founder
    VeraSage Institute
    http://www.verasage.com

  2. Nora Riva Bergman says:

    Point well taken, Ron. Perhaps I should have clarified that Turrow’s theory, although not “new,” has not been given such prominence by the ABA in the Journal. And while the ethics argument has, indeed, been around for some time, many lawyers simply refuse to acknowledge its merit. The billable hour will likely be with us for some time, as will the discussion regarding its eventual demise.
    For those attorneys wishing to learn more about value-based billing, I would highly recommend Ron’s web site http://www.verasage.com.

  3. Tad Delegal says:

    Declaring the billable hour dead is fine for practices where the resources necessary for certain tasks is defined and known in advance. However, I have found in my litigation practice that cases usually don’t evolve as planned. Much depends on the opposing counsel’s or opposing party’s litigation strategy, and some clients simply need to take up more of my office’s time than others. Often, when a client realizes that constant emails, phone calls and meetings are only driving up the bill, the client will decide to limit his or her use of my firm’s resources. When I am successful for a client and get attorney’s fees awarded, I have to demonstrate the reasonableness of my time – I don’t see how a court can award fees without recourse to the billable hour. I didn’t see any real solutions in the Turow article, only a criticism of the existing standard. He suggested that the billable hour has created greater incentive to leverage associates and work them excessively – yet the ABA recently published a report that fewer associates per partner were being employed. I think that the partner – associate model is the legal profession’s version of the medical profession’s formal residency system, and should be encouraged rather than discouraged. I also believe that the billable hour is a good vehicle for awarding efficiency in the legal market place when attorneys and judges recognize the greater value of efficient attorneys who practice at a high level, and who effectively use a variety of billers according to their experience level on a particular case.

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