“Getting to Know You”: The song title is famous and by taking the same approach the Tax Law Office of Luis E... Why Are Law Firms Falling Behind?: This news ought to be deeply disturbing to managing partners and lawyers everywhere,... Being a True Giver When Networking: Over the past 10–15 years there has been a dramatic increase in the number of people... Workplace Harassment: In Life as in Art!: A while back, Ellen DeGeneres did a game with guests on her show. She compared harassment... Ten Proven Strategies to Effectively Implement the Two-tier Partner Structure: Partners in a great many law firms have recognized the value of creating a two-tier... From Papyrus to E-mail: The History of Newsletter Marketing: From e-mail marketing to social media marketing, it seems that every year or two there is... Overcoming the Isolation Of Being a Solo Practitioner: Do you ever feel a little isolated as - a solo practitioner? Like you're - hanging out,... Ethical Issues in Using Social Media: Why should lawyers care about social media, and whether they are using it ethically?... COMBINING PASSIONATE DEDICATION with SPECIALIZED KNOWLEDGE IN FAMILY LAW: Attorneys at Burch, Coulston & Shepard, LLP focus on family law cases in Orange... 14 Marketing Misconceptions That Cost Lawyers A Fortune: 1. You must have a huge, expensive website and blog to attract desirable cases and...
Executive Presentations-468x60-1

Death of the Billable Hour: A Eulogy

Last month, I participated on a panel at the 2016 Futures Conference. My assigned task was to discuss whether the billable hour would finally be dead by 2026. That got me thinking about the future event that would mark the passing of the billable hour as we know it. Would there be a final hourly invoice, billed and paid by a client, signifying the system's demise? Would there be a funeral for the billable hour? And if so, who would be there to eulogize it and what would that sound like?

The eulogy might sound something like this:

We are gathered here today to honor and pay our respects to William "Able" Hour, or "Bill" as many of us came to know him.
Bill Hour had a long career, providing many with joy and others with hand-wringing over the intended and unintended negative consequences he created. Bill would regularly and effortlessly put the client’s interests in conflict with those of lawyers.
He was very adept at hiding the true cost of a project and shunned providing clients with any level of predictability.
Bill Hour would take great pride in promoting redundancy and over-lawyering.
His knack for having clients pick up the tab for process inefficiencies, bill padding and training was unmatched.
I recall a time when Bill and I were returning from a client’s office. We had just landed a very important project, and I asked Bill if we should develop a budget, project plan or timeline that would identify key milestones. Bill assured me, with a wink and a smile, there was no need as he “had it covered.”

ALAS, THE DEATH OF THE BILLABLE HOUR IS NOT TO BE
I believe the billable hour will still be alive in 2026. How so? A few drivers are keeping the billable hour alive, including:

  • An unwillingness by some law firms (or partners within firms) to offer pricing alternatives.
  • A law firm dependence on billable hour targets.
  • Cost accounting that typically drives law firm profitability calculations.
  • Clients that are still more comfortable with billable hour arrangements.
  • Clients addicted to the billable hour data they mine internally or receive from their e-billing vendors, allowing for simple quantitative comparisons.
  • Sophisticated or complex legal work that warrants an hourly billing arrangement.

But there are some changes we should see over the next 10 years:

  • An increase in legal services and products as subscriptions.
  • Less emphasis on billable hour targets at firms.
  • Law firm business models that don't rely on the billable hour to calculate profitability.
  • A growing number of clients that favor outcome or valuebased metrics and rely less on some quantitative metrics like hourly billing rates.
Digg This
Reddit This
Stumble Now!
Buzz This
Vote on DZone
Share on Facebook
Bookmark this on Delicious
Kick It on DotNetKicks.com
Shout it
Share on LinkedIn
Bookmark this on Technorati
Post on Twitter
Google Buzz (aka. Google Reader)
PDF24    Send article as PDF   

Filed Under: Featured StoriesMarketing

About the Author:

RSSComments (0)

Trackback URL

Leave a Reply

  • Polls
    Sorry, there are no polls available at the moment.