Recent Editorials By Chicago and New York Attorneys Reenergize the Debate.
In the August 2007 American Bar Journal, novelist Scott Turow—himself a partner in Sonnenschein Nath & Rosenthal (a large Chicago law firm)—wrote an article entitled “The Billable Hour Must Die.” Among other things, he noted that the yearly hour targets for young associates had risen from 1,750-1,800 hours in 1986 to 2,000-2,200 hours in 2007. How can anyone balance these hours against other aspects of life?
Mr. Turow is not alone, even among powerhouse litigators in large law firms.
In a recent OpEd piece in Forbes, Evan R. Chesler, presiding partner at New York City’s Cravath, Swaine & Moore, calls for an end to the billable hour—even though a midcareer litigation partner at Cravath is said to bill out at $875 per hour. He justifies his call for change this way: “The billable hour makes no sense, not even for lawyers. If you are successful and win a case early on, you put yourself out of work. If you get bogged down in a land war in Asia, you make more money. That is frankly nuts.” Instead, he suggests that lawsuits should be evaluated and priced like a construction project—with attorney and client arriving at a price based on the client’s objectives and providing for some contingencies (including periodic revisits of the pricing based on the litigation “critical path”).
We looked at some of the posted responses to Mr. Chesler’s article, which were quite mixed in their reaction.
Gompy agreed with Mr. Chesler, but thought that the real answer was to lower hourly billing rates.
Joe the Attorney was not so embracing in his response. “Oh, please. Evan is full of it. Billable hours are only used to keep associates’ noses to the grindstones. Billable hours are a joke when it comes to clients …. Clients always ask for estimates before retaining law firms. They also routinely refuse to pay bills or will flat out chop off a percentage of the bill.”
Conlon believes that alternatives to hourly billing simply will not work. “The main problem: dealing with ethically challenged lawyers …. I am at a complete loss to understand how it is ethically challenged lawyers suddenly will be more ethical if only they switched from hourly billing to something else,” with Conlon citing to studies by Professor William Ross that indicate lawyers are less ethical in their billing practices now versus responding lawyers in earlier surveys.
Interesting debate … feel free to let us know how you “clock in” on the issue.
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