Another Trailbalzer: Shepherd Law Group

Congratulations to Jay Shepherd of the Shepherd Law Group for not only making the decision to transition to up-front pricing, but also for today’s front-page article in the Boston Globe: “Beat the Clock: A Boston law firm says no to billing by the hour, and its clients say they are pleased.”

Jay maintains a great blog, Gruntled Employees, and he has written quite a bit about the perils of the billable hour.

What I love about Jay’s approach, as the article makes clear, is his firm’s “refusing to take clients who insist on paying on an hourly basis.” Other insightful comments include:

Shepherd said the new system is also a moneymaker for his firm, which has revenue of less than $5 million a year, because it is attracting new and larger clients who have defected from firms that charge by the hour. He concedes the flat-fee model will be more difficult for larger firms to adopt since they base their annual budgets on the estimated number of hours their lawyers are expected to bill each year.

[Robert E.] Hirshon, the former ABA president, also acknowledges that the current system is entrenched in law firm culture. Many lawyers benefit handsomely from hourly billing, he noted, especially senior partners whose paychecks are fattened by hours logged by young associates. And some clients are wary of trying a new system, despite being dissatisfied with the existing one.

When asked if change across the profession is possible, Shepherd replied: “Can it be done?” “Yes,” Shepherd said. “Will it be done? I think other firms will be dragged along kicking and screaming.”

How true. But they will be dragged not by customers, but by other law firms who have adopted this more enlightened model and continue to attract customers and talent from the firms unwilling to face the realities of a knowledge economy.

I can’t say this enough: pricing changes come from SELLERS, not BUYERS. It’s up to law firms, not their customers, to make this change. It simply won’t happen any other way.

Congratulations to the Shepherd Law Group for blazing the trail the rest of the law firms will inevitably follow.

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