In the aftermath of the whole DLA Piper “churn that bill” debacle, billing practices are a hot topic. It seems that the billable hour endures, while alternative fee arrangements are gaining ground—as are nontraditional firms that offer unbundled legal services. Also: Is bill transparency for you?
- In a follow-up to his New York Times op-ed about the “tyranny” of the billable hour structure, Steven J. Harper explains “Why the Billable Hour Endures.” According to Harper: “The billable hour regime endures because … clients think they have it under control.”
- When it comes to bill padding, hourly billing is only part of the problem, according to Axiom CEO Mark Harris. The No. 1 contributor is an environment that rewards the status quo and offers little incentive to those at the top to change.
- But don’t worry, hourly rates aren’t dead yet—but clients are increasingly negotiating discounts. This “charade” of simultaneously jacking-up prices and demanding discounts is something The Careerist believes means everyone involved is getting what they “deserve.”
- It’s not just the hourly rate of BigLaw lawyers that are being increasingly scrutinized, the mark up on contract lawyer rates in class-action suits are at the center of a recent dispute. In a practice called “obscene” by one commentator, clients are often billed up to $550 an hour for work that the contract lawyers are only paid $60 to $75 an hour.
- Alternative fee arrangements were cited by 50 percent of respondents to a recent Legal Week (sub. req.) survey as their preferred way to reduce legal spend, with only 11 percent favoring traditional hourly billing. “Hourly rates are fundamentally and philosophically flawed,” one respondent said.
- In an effort to offer clients better value for their money, Weil Gotshal & Manges’ London office now offers 15 alternative billing options that partners can use. The move seeks to “offer clients a range of prices for different aspects of a transaction, as well as bundled deals and retainers.”
- Speaking of alternatives, so-called “unbundlers” offer legal services traditionally done by the big law firms. A Strategic Legal Technology post explores the implications that unbundling might have on the future of the legal market, asking “Will Unbundling Undo BigLaw?”
- A new startup wants to make law firm billing more transparent, believing that clients are more likely to pay when they understand how their bill is calculated. Viewabill co-founders have signed up nearly 80 law firms so far.