A lot of lawyers and consultants out there have built profiles and reputations as “innovators” by promoting alternative billing as the answer to much of what ails the legal profession. I’m confused about what is so ground breaking.
Everyone seems to love to hate hourly billing these days. People argue that hourly billing values quantity over quality and repetition over creativity. Perhaps. But it also endures for good reason. It is simple to administer and easy to understand. Further, the marketplace corrects pricing irregularities and rewards efficiency. A law firm which can provide quality and creative solutions at a more cost effective price is rewarded with more clients – irrespective of whether the legal fees were calculated by an alternative or traditional hourly method.
Another argument for alternative billing is that hourly billing is the enemy of “work life balance.” It is true that many associates and partners are compensated by measuring their productivity in terms of their billable time. That said, firms also evaluate lawyers based on work quality, client satisfaction and non-billable activities such as business development, professional development and staff training. And let’s face it: in private practice, lawyers who work more hours generally make more money. This is going to be the case whether compensation is calculated in terms of billable hours or some other mechanism.
At Heritage Law, our goal is to provide cost effective and predictable pricing to our clients. We offer a variety of billing options including flat fee, a monthly retainer, a one time fee limited to a time frame and hourly with a price cap. None of this is rocket science. It would be presumptuous to suggest anything otherwise.
Firms that boldly state that they are “revolutionary” for offering alternative billing to their clients just sound silly. If it makes you feel better to call yourself a “rebel” for providing various billing options to clients – hey, go for it. But your clients, who are used to providing various options to their customers to compete in the marketplace, probably do not understand what all your big hoopla is about.
Over the years I have heard lawyers talk about the \marketplace\ in relationship to legal services and pricing. I have seen little evidence of a functioning market place. Other than for low cost services such as wills or conveyancing (where notaries are a competing group)I do not believe that there is a marketplace which \corrects pricing irregularities and rewards efficiency\. Fees in most areas are really determined by how much the biller can push the envelope which in turn is determined by a whole bunch of non-market things from power relationships to service mystification.