Redwood Analytics

I woke up this morning and started to read up on the recent news articles as I do each morning.  There has been a lot of press around alternative fee arrangements and much of it is needed.  What I have not been pleased with is the sensational headlines such as "Death of the Billable Hour" or this morning's headline from law.com, "Survey Shows the Bell Is Tolling for the Billable Hour."  Really?  Did the ACC survey show that the billable hour is on its last legs?  The answer is no.  What these surveys do show is what most of us already know.  There is a shift in demand and alternative fee arrangements are becoming more popular among in house and outside counsels alike.  Firms that are not making the transition to alternative arrangements will fall behind.  This is a slow moving process that will take time to perfect both for in house counsels and their outside counterparts.  When firms are looking for direction on how to adapt their model to help supply their clients with proper alternative fee arrangements these sort of sensationalized headlines do not help.

If you read within the lines of the article from today's entry, it actually states that there are still corporate counsels that work solely on the billable hour.  How can the "bell be tolling" then?  The article also fails to mention that the majority of in-house counsels still have billable hour arrangements.

 It is fine to focus on the fact that there has been sweeping change and that alternative arrangements are becoming much more popular, but let's not go overboard.  I have stated the all arrangements at some point should have a fixed fee, but I am not blind in the fact that it will take time and in some instances especially as firms and clients learn the ropes on project management, the billable hour might be the best solution.

There is a structural change taking place and firms will have to adapt, but sensationalizing the transition is not helpful.  Firms and clients alike need direction to make this work rather than selective statistics.