JazzOne wrote:You may be right. Then again, I was at another interview, and the interviewer started talking to me about billable hours. I thought to myself, "Are you kidding?" That made me very nervous. That model looks like the past to me. There are firms in California now starting to bill per project and doing defense contingency cases. Perhaps it's just wishful thinking on my part, but I see the "billable hour" as a representation of everything that is wrong with big law, and I would love to see some fundamental pricing changes for legal services. I want lawyers to be rewarded for efficiency, not dragging out every step of the litigation process. I guess I had hoped that an economic crisis would be the impetus for that. I read an article today that forecasted another economic downturn resulting from the fact that banks are still engaging in pre-ITE practices. This is going to get interesting.
The billable hours model is not going to go away. There may be an increase in the number of projects that are billed out as a flat rate, but that went on before ITE as well, just more under the radar.
Clients don't want to get rid of the billable hour. Unless a project is routine (which is not the type of work that BigLaw usually does), it is very difficult to predict how long it is going to take. To set up a fixed fee arrangement, both sides have to make a bet on the scope of the project. The fee will be set at a price that the firm believes is greater than or equal to the actual time that will be spent and the client believes is less than or equal to the time needed. Coming to an agreement on that is not generally easy. Further, in a fixed fee arrangement, the definition of the scope of the project becomes very important. Legal work is like trying to map out an iceberg by looking at what is above water. Once you go below the surface and get into the project, the scope often changes. Because of this firms will either insist on a high fixed fee, or a very narrow scope. The first scenario is not usually one the client wants to take, and the second one generally devolves into the typical billable hour arrangement (the parties agree to a fixed fee with a limited scope and then as the project becomes more complex, the additional work gets billed separately).