Fearless lawyer Mike Ayotte who is never afraid to express his opinions as The Last Honest Lawyer, recently wrote a post titled “The Billable Hour is Dead” and likened lawyers use of the billable hour to the demise of dinosaurs, whilst conceding that even after dinosaurs met their fate lizards pulled through (as did crocodiles and sharks!).
As you know, I would so love to believe that the billable hour is indeed dead-but I regret to report it is not- at least not yet. It is no doubt sick, but if it is dying its death throes are still reverberating.
I recently returned from the US attending some legal conferences and meeting with many lawyers, law firms, legal commentators, consultants, academics, legal authors and law students. Almost without exception (the exceptions primarily being legal consultants and software vendors who peddle time “capture” methodologies and who perpetuate the “lawyers sell time” myth) all agreed that the billable hour is pretty crook, is a sub optimal model and is no longer meeting the business needs of either the law firms or their clients (let alone the social and cultural needs of those who work in law firms).
What then has largely been the response from the profession to this sickness?
Apart from the innovative and courageous outliers- whose numbers I hasten to add are increasing all the time- and who have put the billable hour out of its misery by completely changing their business model- most firms apply a bandaid approach and continue to work within, and therefore prop up, the existing leveraged based business model.
Some firms have come up with all sorts of ingenious ways to increase the billable hours of their lawyers especially by spending huge dollars on technology & training so lawyers can better (“more accurately”) record their time wherever they might be and whatever the day or night of the week. (Atticus Finch’s tombstone would these days read something along the lines of “Here lies Atticus-a heroic biller & time recorder”). Whilst it is true many firms have adopted Alternative Fee Arrangements (mostly in response to client demands, rarely of their own volition), most of those AFA’s look to me to be billable hours in drag (“if it walks like a duck, quacks ……”) based around fixed fees, capped fees, blended rates, etc- all calculated on the time x rates x people model.
Is it any wonder good people are increasingly looking for better alternatives than working in a private legal practice; clients are looking to other providers to add value to their businesses; and that external disruptors will continue to flock to the legal profession in droves to exploit law firms’ soft underbelly-our lack of flexibility, failure to innovate, unwillingness to collaborate, our short term greed for the almighty dollar, our 19th century governance structures, absence of diversification-and most of all our cultural desert.