Larry Bodine's PROFESSIONAL MARKETING Blog reprints an article from the April 18 issue of the Chicago Tribune titled "Hourly legal fees under attack, Traditional billing by time spent is standard at most big law firms, but McGuireWoods is advertising alternatives."
One of the more interesting things about entering the blogosphere has been the realization that I am not the only person who (1) believes hourly billing is bad for clients and bad for the profession of law and (2) is trying to change the way law is practiced. In the above noted article, there are several references to large law firms which offer innovative and service-oriented billing alternatives to their clients. Here are some of my favorite quotes:
- Survey after survey of in-house law departments shows that their top priority is reducing the money they spend on outside law firms. Some of the growth in legal expenses is out of their control, as companies deal with more lawsuits and regulations and turn to outside lawyers to handle these matters.
- One Chicago firm has found that alternative arrangements work in handling large, complex lawsuits. Bartlit Beck Herman Palenchar & Scott, a boutique litigation firm, typically charges a flat fee, payable in monthly installments. The client retains a percentage that it pays only if the firm is successful. Otherwise, the client keeps the money.
- "We like to get paid for results rather than the hours," said Sidney "Skip" Herman, Bartlit Beck's managing partner.
- McGuireWoods has been offering alternatives to hourly bills for years. About 35 percent of the firm's annual revenue of about $300 million comes from alternative billing arrangements.
I have always believed that alternative billing offers a tremendous marketing advantage, since so few firms do it. Virtually every client hates paying by the hour. But most have no idea there are alternatives.
I am about to launch my own advertising campaign. I have selected the most upscale restaurants in my county, where business owners and managers are most likely to dine. My "Johnny Ads" displayed in restroom will play on client discontent with hourly bills by attorneys. It will then introduce them to the fact our firm bills for results, not hours. I have purchased a four-month run from June through September. I'll let you know how it goes.