The Greatest American Lawyer

Ronald J. Baker Continues His Push to Kill the Billable Hour

For those of you who don’t know, Ronald J. Baker is one of the foremost advocates for alternative billing and killing the billable hour.  He started his accounting career with KPMG in San Francisco.  Today, he is the founder of VeraSage Institute, a think tank dedicated to teaching value pricing to professionals around the world.

If you haven’t checked it out, he was interviewed on blogtalkradio recently about his mission to kill the billable hour.

Why "Trust But Verify" Hourly Billing Doesn't Really Work

We recently posted about some of the challenges which firms that are struggling financially face in preserving their client relationships.  Let's face it, there is always an uneasy balance of "friend or foe" between clients and their hourly billing law firms.  Some commenters replied that clients need to "trust but verify" the hourly billing engaged by their law firms, perhaps even more carefully now that there is a lot of financial stress in the system.  Others noted that big law firms who are cutting lawyers should be more trustworthy since they are at least taking measures to cut costs.  Other firms who aren't cutting lawyers may simply be engaging in "make work" projects which provide very little value to clients. 

The Art of Making a Proposal to a Client of a Flat Fee Project

Do you want to know what the best part of hourly billing is?  Hands down, bar none, the best reason to bill by the hour is its simplicity.  In fact, it is really thoughtless on almost every level.  A client calls with a problem, you tell them what the retainer amount is, and you get to work.  Putting aside for a second the fact that hourly billing does nothing to provoke a conversation as to whether or not legal work should actually be done in the first place; I believe that it is the simplicity of the business model that perpetuates the hourly billing system. 

Changing The Way Law Is Practiced One Recession At A Time

Here is a threaded discussion on LinkedIn titled “Will the recession change the way law firms do business permanently?” posted by Larry Bodine, Editor at LawMarketing Portal.  Larry points out that many people and large corporations are seeking smaller law firms that offer alternative billing in light of the current recession.   Here is Larry’s survival guide to weather the recession:

Should You Bill Hours, Value or Risk? OFL Knows the Answer.

The Overflow Legal website has a solid list of blogs and articles from around the internet addressing the issue of alternative billing arrangements by law firms.  If you want to see the top post as voted by you, the reader, check out the OFL category called “Billing Clients: Should I Bill Hours, Value or Risk?” While you’re there, you might want to subscribe to either the popular or upcoming RSS feed for that category.  If you see articles you think are the best, go ahead and vote for them as well.  To see all posts regarding the billable hour, check out the entire category list here. 

Clients Love Flat Fee Billing Based on Defined Deliverables

I’m in Los Angeles, California this week for a federal court status conference and facilitated mediation in an unfair competition, keyword advertising trademark infringement case.  At dinner last night with the clients, the issue of lawyers quickly came to the forefront.  Both clients’ fathers were lawyers, and are inundated with friends who are lawyers.  They wanted to let me know that they really appreciated and loved the flat fee defined deliverable billing model, which we use at our firm.  One of my clients shared a story.  His dad pulled him aside during a hunting trip when he was a teenager.  He let his son know that he was not making any money on the trip because he was tied to an hourly billing method.  His dad let him know that his friends, who were businesspeople, were all still making money even when they weren’t sitting at their desks. 

Unfortunately, neither the flat fee nor the hourly billing method allows you to make money when you’re not working in the service business.  But I am constantly being reminded by clients, especially sophisticated clients, that they prefer and appreciate the flat fee defined deliverable model.  A lot of times, lawyers and commentators discussing the issue forget that the real proof is in the pudding.  Clients prefer to know what they’re going to get and what it’s going to cost.  Lawyers prefer to know what they have to deliver and to be in a position to focus on those deliverables.

The Nonsense of The Billable Hour

In an article he wrote for Forbes Magazine, Trial Attorney Evan R. Chesler, discusses a better way to bill clients by simply playing fair.

In Response to David Giacalone’s Concerns about the Ethics of Value Billing

I’m doing some research on value billing for lawyers; I came across the one blog post which beats out the GAL web site on the issue on this issue of “value billing” on Google Search. David Giacalone over at the f/k/a blog posted back on December 03, 2008 that “Value Billing-Pricing by lawyer raises many ethical red flags”.  David notes that he has been raising red flags over ethical issues concerning value billing for some time, listing the following posts chronologically:

• “Value Billing and Lawyer Ethics” (Jan 28, 2004)
• “broadening the hourly billing debate” (Aug. 18, 2008)
• “smart clients care about . . . marketplace ‘value’” (Nov. 25, 2008)

It appears pretty clear that David has never engaged in value billing with his clients since his list of concerns don’t seem to bear any relationship to the reality of value billing.  For instance, David claims that value billing proponents supposedly make the following arguments.

The Adam Smith Blog Contemplates the Potential Consequences of Economic Downturn on the Legal Profession

Bruce MacEwen over at the Adam Smith blog has an interesting post called, “Lessons From The Depression.”  Bruce notes that never in his career has there been a time of greater uncertainty.  “The future is hard to visualize as it is to see the East Side of Manhattan from Central Park West on a deep foggy morning…”  Essentially, Bruce notes that the economic downturn will have impacts on the business of law.  Smart law firms are working hard to guess what those changes will bring so they can be ahead of the curve.

What Impact Will Barack Obama’s Message of Change Have on Society’s Institutional Bias To The Status Quo and Tradition

I remember one point during the campaign when John McCain repeatedly stated that America needed action not talk.  His overall point was that action was more powerful than ideas. That made me think.

Most of the time, an idea rendered to idle chatter is without substantial import.  But John McCain got it wrong.  An idea rendered to a movement is far more powerful than a single man’s actions.  When and idea is adopted as the norm, armies of followers take the lead.