Speaking the Language of Real Estate, Business and the Law: The strength of the team is each member. The strength of each member is the team. –... 19 Secrets That Increase Response to Print Ads: Have you ever purchased a display ad in the newspaper and then not received a single... Thinking of Relocating Your Business? The City of San Diego May Pay You to Stay: In an effort to attract and retain high-performing companies, the San Diego City Council... Build It or Change? Making Culture Tangible: 30,000 feet. Long-haul travel. I am tired but intrigued about what I am observing. - Not... The Introvert Lawyer’s Guide to Networking: A few years ago, a meme that I found hilarious circulated the internet. It read... The “If-the-Market-Knew-My-Story” Approach to Business Development: There is a basic principle in communication theory—shared experiences form the basis... The Future of Law Firm Business Development Belongs to the Bold: Ultimately, the meek may, indeed, inherit the earth. But history suggests that, in the... Community News – September 2018: The Law Offices of Andy Cook is pleased to announce that Joshua Yee has joined the... Finding the Best Answer to “What’s Next” in Business Transition Planning: At some point in the natural life cycle of a closely held company, self-made... Balancing Act—Lawyers, Time, and Life: Finally, it is all coming together. You’re licensed. You are ready to practice on your...
Executive Presentations-468x60-1

Death of the Billable Hour: A Eulogy

Last month, I participated on a panel at the 2016 Futures Conference. My assigned task was to discuss whether the billable hour would finally be dead by 2026. That got me thinking about the future event that would mark the passing of the billable hour as we know it. Would there be a final hourly invoice, billed and paid by a client, signifying the system's demise? Would there be a funeral for the billable hour? And if so, who would be there to eulogize it and what would that sound like?

The eulogy might sound something like this:

We are gathered here today to honor and pay our respects to William "Able" Hour, or "Bill" as many of us came to know him.
Bill Hour had a long career, providing many with joy and others with hand-wringing over the intended and unintended negative consequences he created. Bill would regularly and effortlessly put the client’s interests in conflict with those of lawyers.
He was very adept at hiding the true cost of a project and shunned providing clients with any level of predictability.
Bill Hour would take great pride in promoting redundancy and over-lawyering.
His knack for having clients pick up the tab for process inefficiencies, bill padding and training was unmatched.
I recall a time when Bill and I were returning from a client’s office. We had just landed a very important project, and I asked Bill if we should develop a budget, project plan or timeline that would identify key milestones. Bill assured me, with a wink and a smile, there was no need as he “had it covered.”

ALAS, THE DEATH OF THE BILLABLE HOUR IS NOT TO BE
I believe the billable hour will still be alive in 2026. How so? A few drivers are keeping the billable hour alive, including:

  • An unwillingness by some law firms (or partners within firms) to offer pricing alternatives.
  • A law firm dependence on billable hour targets.
  • Cost accounting that typically drives law firm profitability calculations.
  • Clients that are still more comfortable with billable hour arrangements.
  • Clients addicted to the billable hour data they mine internally or receive from their e-billing vendors, allowing for simple quantitative comparisons.
  • Sophisticated or complex legal work that warrants an hourly billing arrangement.

But there are some changes we should see over the next 10 years:

  • An increase in legal services and products as subscriptions.
  • Less emphasis on billable hour targets at firms.
  • Law firm business models that don't rely on the billable hour to calculate profitability.
  • A growing number of clients that favor outcome or valuebased metrics and rely less on some quantitative metrics like hourly billing rates.

Kevin Bielawski

Kevin Bielawski has 20 years of experience in the legal industry in various financial roles. As director of Legal Project Management & Strategic Pricing at Husch Blackwell, he consults with firm partners and clients to identify business objectives, value perspective, process inefficiencies and assist with solution development and implementation. He regularly leads the execution of fee arrangements that meet clients' budget demands. Kevin is a Certified Project Management Professional and a Legal Lean Sigma White Belt. Previously published in Attorney at Work.

More Posts

Digg This
Reddit This
Stumble Now!
Buzz This
Vote on DZone
Share on Facebook
Bookmark this on Delicious
Kick It on DotNetKicks.com
Shout it
Share on LinkedIn
Bookmark this on Technorati
Post on Twitter
Google Buzz (aka. Google Reader)
PDF24    Send article as PDF   

Filed Under: Featured StoriesMarketing

About the Author: Kevin Bielawski has 20 years of experience in the legal industry in various financial roles. As director of Legal Project Management & Strategic Pricing at Husch Blackwell, he consults with firm partners and clients to identify business objectives, value perspective, process inefficiencies and assist with solution development and implementation. He regularly leads the execution of fee arrangements that meet clients' budget demands. Kevin is a Certified Project Management Professional and a Legal Lean Sigma White Belt. Previously published in Attorney at Work.

RSSComments (0)

Trackback URL

Leave a Reply

  • Polls