Billable hours under attack

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					   CAREER COUNSELOR’S CORNER                                                                                                     1.800. 973. 1177

Billable hours under attack
[Jim Dunlap]
Alternative fee systems sought to improve quality of work, attorney lifestyles

Is the billable hours system of calculating          good answer.”                                       with law firms regarding an alternative to the
fees and assessing associate performance                                                                 billable hours system and she believes they
undermining the quality of both legal service        Katy Englehart, presidential initiative man-        are listening.
and attorney lifestyle?                              ager for the ABA President’s Office, said
                                                     the commission has developed electronic             “All of the law firms I talk to are very will-
American Bar Association President Robert            questionnaires for corporate counsel and law        ing to do alternative billing arrangements
Hirshon thinks so. The Commission on Bill-           firm attorneys and a Web bulletin board - at        - they’re absolutely willing to try,” said Kelly.
able Hours that Hirshon created last August          “Technology makes these things possible.
is currently in the process of surveying law         - to serve as a forum for idea and experience       I can define my project, put it on an RFP in
firms and corporate counsel to formulate             exchanges. Law students are encouraged to           e-mail, send it to my 10 or 15 favorite firms,
alternative billing practices models that may        contribute to the dialog.                           and then find out what each one will do it
help alleviate those concerns.                                                                           for.”
                                                     A full report -including model law firm
Speaking at the ABA Board of Governors               metrics, policy and evaluation processes,           Kelly said that while there are a variety of
Retreat in August, Hirshon said law school           best and worst practices and models for             alternative fee methods - flat fee, contin-
graduates frequently sign on with firms              alternative methods of bidding work - will be       gency fee with a success premium, monthly
requiring 2,400 or 2,500 billable hours a year.      released at or just before the ABA’s annual         retainers and others - the real measure of
“If you bill those hours, you don’t have time        meeting in August 2002.                             value is the quality of the work.
for pro bono, you don’t have time for the bar
association, you don’t have time for life,” he       The report will also include a model diet for       “We should do it the old-fashioned way - by
said. “And that is what is happening.”               associates, breaking down the number of             quality of work,” she said. “Any law firm that
                                                     hours associates should be required to work         uses the billable hour as the measure of the
Anastasia Kelly, senior vice president and           and what percentage should be actual client         quality of work is doing it wrong. You could
general counsel for Sears, Roebuck and Co.,          billable work.                                      use it [to determine] a bonus, I suppose,
is co-chair of the commission with Jeffrey                                                               but it should be the quality of work first and
Liss of Piper Marbury Rudnick. While Kelly           Kelly said the inclusion of corporate counsel       foremost.”
shares Hirshon’s concern over quality of             in this survey is a critical difference in previ-
legal service, she said the billable hours           ous attempts to address the billable hours          The system is not only hard on associates,
system is just plain not working.                    dilemma.                                            but can also create major client problems for
                                                                                                         the firm.
“While I think the question of quality in the        “One of the reasons this discussion wasn’t
profession is very important, I think it is          successful when it first came up 15 years           “If you’ve got an associate spending 100
equally as important that with all the focus         or so ago was that it didn’t involve inside         hours on a product your client thinks is only
at law firms on realization rates, salary rates      counsel,” Kelly said. “We [inside counsel] are      worth 25, you’ve got a problem,” Kelly said.
going up, and pressure by CEOs to cut costs,         the client - there should be an understanding
it’s coming to the point where something has         that CFOs need to be involved.”                     This story appeared in the March 2002 edition
to happen,” Kelly said. “The traditional way                                                             of The National Jurist,
of doing business with law firms is not going        Kelly said that in her capacity as corporate
to provide either firms or their people with a       counsel, she has had numerous discussions


Description: Alternative fee systems sought to improve quality of work, attorney lifestyles. Billable hour system of calculating fees and assessing associate performance is undermining the quality of both legal service and attorney lifestyle.
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