Fellow blogger Adam Smith, Esq. has assembled his second panel of “savvy bloggers” to address the question of the future of the billable hour.
The assembled responses are an interesting read about the basic economic model of the legal profession. My response to his question was:
For the high-end, non-commodity work that large law firms do, the billable hour will prevail, at least for next decade or two and likely beyond. When I started in the legal market in 1989, I was sure alternative billing was just around the corner. It appears very little high-end work has moved away from the billable hour so I am now reluctant to predict radical change. I’ve spoken with lawyers eager to offer alternatives but clients decline. The billable hour will stay for the same reasons it has not yet gone away: risk aversion, lack of disciplined and business thinking by attorneys in firms and law departments, and a failure of imagination.
As a proponent of best practices and the application of technology to law practice, I wish it were otherwise. A move to fixed fees would create strong pressure for efficiency, which would favor adoption of demonstrated best practices and more technology to automate wherever possible. If e-billing spreads and if general counsels actually analyze the data rigorously (the latter being a BIG IF), then there might be a move toward tighter project management and budgets. This would at least vitiate some of the pernicious impact of the billable hour.