The death of hourly billing could lead to happier lawyers

A look at the pros and cons of value billing models

The 2011 Futures Conference was held recently at the Illinois Institute of Technology Chicago-Kent College of Law, so I start by thanking Dean Harold Krent and his staff for letting me audit this very practical discussion among in-house counsel, law firms and consultants. This was a dynamic conference that hit on the major changes in how legal work is getting done, ranging from disruptive technology innovation to project management discipline to the use of alternative service providers.

I will focus on what I believe is the essential take away message from this conference, and by far the most relevant to anyone who practices law for a living: Hourly billing as the predominant model for buying legal services may finally be on its deathbed.

If I am right, and value billing models result in happier lives within law firms, then it logically follows that fewer law firm attorneys will run toward the exits. We all know that most attorneys who move in-house do so for reasons other than compensation.

In the short term (maybe another 10 years), law departments can hire top notch talent from law firms that struggle with the transition to non-hourly models. And the sad but very real oversupply of JDs generally will allow companies to pick from the best among unemployed attorneys. Long-term, however, successful value billing law firms should stabilize around service teams in a way that we have not seen historically. Turnover percentages will shrink dramatically. And the unemployed ranks will get down to folks who lack the training or pedigree that companies want to hire.


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Mike Evers

Mike Evers recruits attorneys for corporate legal departments throughout the United States. Please visit His...

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