Unlikely Allies in Billable Hour Reform

             In the wake of the current economic crisis, billable hour reform may be having its day. Sue Wang, a former associate at Latham & Watkins, was recently profiled in The Washington Post for starting a five-lawyer boutique firm that operates on a "timeshare" model.   Once associated with pricey beachfront real estate, the "timeshare" idea at the firm, Clarity Law Group, allows clients to "pay a set fee for access to the entire firm." With this new policy, Ms. Wang hopes to carve out a niche serving small businesses and start-up companies which she believes are "notoriously under-lawyered" and which may represent one of the last untapped growth markets in the legal profession. Ms. Wang described her idea as creating a "hybrid model between big-firm contractors and in-house counsel."

            Interestingly, another hybrid of diametrically opposed ideas is at work behind the current wave of calls for billable hour reform.  Labor-oriented advocacy groups like Building a Better Legal Profession and Working Mother Magazine  have long held that the billable hour system impedes work-life balance and disproportionately hurts women, who have greater responsibilities at home.  Many lawyers who work under a billable hour system describe accounting for their time as an alienating, demeaning task and the least enjoyable part of their work. Now these lawyers are joined by an unlikely ally: their corporate clients.

            As a weakened economy has forced belts to tighten across industries, corporations have begun to question the logic behind their legal bills. The Association of Corporate Counsel (ACC),   a powerful lobbying force with over 25,000 members in over 70 countries, is currently "pushing hard for alternatives to the billable hour" according to Working Mother.

            Firms are taking heed. A recent report by legal consulting group Altman Weil   (Featured in this report,) revealed that 94.5 percent of law firms and all firms with over 150 attorneys have alternative fee arrangements. The firms further report that this is "primarily in response to client requests."  In a down economy alternative fee arrangements, which often yield lower profits, at seen as "business-focused and profit-driven rather than...as concessions to clients." A partner at Orrick, Herrington & Sutcliffe predicts that "this economy will drive the death of the billable hour."

            Pressure from clients may be achieving in one broad stroke what pressure from talent was gaining in fits and starts: real viable alternatives to the billable hour.  But with profit-motives and not talent-management driving these changes, it is now upon associates to ensure that these reforms produce tangible improvement to work-life balance and are not just an excuse for lowering salaries.

 

Building a Better Legal Profession (BBLP) is an organization based at Stanford Law School.   BBLP is a national grassroots movement that seeks market-based workplace reforms in large private law firms. For more information, visit BBLP's Web site at www.betterlegalprofession.org.