Tuesday, July 5, 2011

In defense of the billable hour

Alternative fee arrangements are all the rage today given that market conditions for legal services have put the client in the driver's seat.  But there are times when even the most parsimonious client will get better value by paying a high hourly billing rate.  From the online ABA Journal:

“Before you get caught up in the [alternative fee arrangement] stampede, remember that hourly billing can still work when done right. Both are part of a GC’s cost-control portfolio,” John Wallbillich wrote in a recent post at Wired GC titled "Two Cheers for Hourly Billing."

Although he is quick to distinguish hourly billing as an accounting convention from the regime of billable hours designed to boost law firm revenue, Wallbillich addresses the need for general counsel to more closely examine the expertise they receive before balking at a high billable rate—as a more experienced (and costly) lawyer may be able to get a job done more efficiently. Additionally, by choosing firms with busy lawyers—who are more geared to finding solutions rather than generating fees—GCs can better avoid outside counsel looking for work to fill hour requirements, Wallbillich says. And in-house lawyers shouldn’t count out lower-cost quality firms.



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