Another Look at the Death of the Billable Hour
Last year, I wrote about an article written by a colleague of mine, D. Andrew Byrne regarding the billable hour and its demise. Well, it seems that this topic has continued to generate interest in the business world and for good reason. It simply makes sense because when it comes to clients, one size does not fit all when it comes to billing.
Alternative billing arrangements are nothing new for lawyers. With the ever increasing cost of doing business, companies have to think about the bottom line and what makes sense when it comes to hiring and using law firms and lawyers.
While the traditional billable hour model may make sense for some clients, not all clients can afford to do business entirely under that model. And so, the push away from the billable hour model is occurring and the move for some is toward the alternative fee arrangement because the bottom line depends on it.
For some companies this means hiring more attorneys or assigning more work to their own company lawyers. For others it means flat fee arrangements or contingency fee agreements but usually some form of billing other than the billable hour model.
Either way, the message is simple: legal work needs to be cost effective for both the lawyer/law firm and the client. Undoubtedly, the future of the billable hour is becoming less certain and staying competitive in the legal marketplace will inevitably have to include more alternative billing arrangements.