I met with a new prospective client this morning who was thinking about changing counsel because an experience he had recently had with their current counsel. Essentially, the attorney had failed to keep the client informed. When the attorney dropped the ball, the attorney failed to provide that information to the client. Once slight of hand led to another. Before you know it, the client had thousands of dollars wrapped up in a legal project that should have never been started in the first place. Of course, the lawyer charged the client for every mistake along the way that the lawyer had in fact made.
The interesting part of this story isn’t that it occurred. It is the brashness that some attorneys have concerning their own mistake. Let’s say for the sake of argument that the attorney really did put in every one of the hours that was billed (which would be hard to calculate since that attorney provide no accounting of the number of hours despite the hour billing model, instead merely providing some narrative information with a final tally), the lawyers refusal to take any responsibility for events along the way is astonishing. The hourly billing model limited this attorney’s ability to see anything except his own hours. The drive to get paid for each and every minute spent on a client matter drove the attorney to bill every minute, even for all of that attorney’s mistakes along the way. To suggest that the client should not have paid for that activity would seem pure common sense to most of us. But to the hourly billing lawyer, such a suggestion is blasphemy.
People sometimes wonder how hourly billing has become such a bad business model for clients. The truth is hourly billing didn’t start out this way. But over the decades, lawyers devoted to hourly billing continued to see the only way to raise revenue, profits and their own income was to find new and creative ways to bill hours. Before you knew it, meaningless client phone calls were being billed by the hour. Transmittal letters with no real information included were being billed by the hour. Review of meaningless court paperwork, which probably took less than one minute of attorney time, were being billed in 18-minute increments. Unsolicited letters from lawyers who had no pending matters were being sent to clients. And those clients were thereafter being sent for bills. Lawyers who contacted or solicited their clients for new work were sending bills for their solicitation letters. Lawyer screw ups were billed identically to all other activity on the file. And to suggest that a lawyer would eat two minutes of their time was viewed as an attack on revenue. Any longer, there was no reason for lawyers to take any risk with the client, discuss or invest in deliverables or even think strategically on their client matters. The business model was hours, not value. Lawyers began to wake up in the morning thinking of nothing else except how to create a billable event.
Needless to say, this lawyer lost their client’s work this morning. They don’t know it yet. And when the find out, they’ll think someone is attacking them and their client base. They won’t for a second take a shred of responsibility for their own failures and inappropriate billing tactics. They will have become so obsessed with their own billing sheets that they will be incapable of learning from their own errors.