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01/05/2009

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Research shows that the billable hour is here to stay. General counsel prefer it, according to the annual ACC/Serengeti survey of in-house lawyers. Visit http://www.lawmarketing.com/pages/articles.asp?Action=Article&ArticleID=816 and look for the bullet point: "The hourly billing process is solidly entrenched, and fewer in-house counsel – only 12.7% -- got a discount from their law firms."

Larry Bodine, Esq.
Apollo Business Development
630.942.0977
[email protected]
www.LarryBodine.com
http://twitter.com/LarryBodine

I am hoping in 2009 individuals (aka: people getting the bills) will stand up & defy the authority of vague billing. Transparency is key to any healthy working relationship, IF you want it to go beyond the initial purpose of the bill.
Yes, I am biased & I do work for an online/mobile time tracking software company, but it goes beyond the time you billed your client.
Ongoing relationships will create stability. You do not gain any points in the relationship column w/o proof of what you did...especially when it is in perfect 15, 30 or one hour blocks. Come on, consumers are smarter than that.
I have billed in those 15 minute blocks & I always felt terrible for it, therefore I would always throw in a few minutes/meetings here & there for "free". Honestly, I was probably loosing more money than I should of & that is not all right either.
My .02 anyway.
-jen
[email protected]

For just about everything other than legal services, a common belief system and marketplace dynamics provide context in which acceptable pricing can be approximated and agreed. Cost, whether expressed as billable hours or otherwise, is essentially arbitrary without due regard to value and context.

A business approach to value determination and pricing would take into account client needs, supply and demand, market conditions, history, client and circumstance specifics, cost of providing the services, profit margins, and all the other contributors to perceived value. There is no reason, other than habit, to think that legal services differ fundamentally in this regard from every other type of service, professional or otherwise. From a value quantification standpoint, legal services are not more dependent on the time spent producing them than anything else one might buy.

As a former general counsel and law firm partner, I believe strongly that strategic "we're in business together" relationships between companies and their outside law firms create genuine win-win results. If you're interested in a case study that proves this point, you can find it here: http://www.abanet.org/abastore/index.cfm?section=main&fm=Product.AddToCart&pid=V03PCBB

There are many areas of practice that can and should switch to flat fees. Some areas, though, like unpredicatable litigation would be really hard to switch to a flat fee arrangement. (Especially something like divorce litigation, where contingency agreements are usually not allowed.) I've also worked on a case that lasted for around 10 years - a family partnership that owned several businesses gone awry. I don't see how a flat fee or contingency would work there. So, I guess I'm all for implementing change for where it makes sense, but it just doesn't make sense everywhere.

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