The Tyranny Of The Billable Hour

In a past post, The Growing Law School Disaster, I wrote about several very disturbing trends concerning law school graduate debt and lowering law school admission standards.  In a terrific op-ed in the New York Times today, attorney Steven J. Harper writes about a closely related issue: the billable hour system and the deleterious effects that system has on the profession, individual lawyers and the clients we serve.  Harper writes:

The billable-hour system is the way most lawyers in big firms charge clients, but it serves no one. Well, almost no one. It brings most equity partners in those firms great wealth. Law firm leaders call it a leveraged pyramid. Most associates call it a living hell.

Having lived through that hell (and even written a bluesy song about it), I can attest to the accuracy of Harper’s description.  His new book, The Lawyer Bubble: A Profession In Crisis, sounds like a must read for all of us in the profession, and for a younger generation considering joining the profession.  His suggested antidote to the billable hour system is alternative billing arrangements:

There’s a way out of the mess. But it requires clients to press harder for alternative fee arrangements, courts to back away from policies that embed the billable hour, law firm leaders to stop rewarding excessive associate hours and senior partners to consider the deleterious consequences of their myopic focus on short-term profit-maximizing behavior.

I agree that alternative fee arrangements are the way to go for many, but not all, types of legal work. For example, many types of corporate work, trust and estates and tax work, can be done on a fixed fee basis because it is possible to predict the cost of that work with reasonable certainty.  But other types of work, particularly complex litigation, are virtually impossible to price out in advance.  There are too many variables, and the costs are often driven by the need to respond to the litigation tactics of opposing counsel, which are impossible to predict.   I don’t see the billable hour system disappearing for those kinds of cases.  But I would be happy to be proved wrong on that score.

For more insights into the legal profession and its challenges, check out Steve’s award winning blog, The Belly of the Beast.