Lawyers on
the Practice of Law...
The Hours:
The short, unhappy history of how lawyers bill their clients
by Niki Kuckes
Few other industries would thrive if they measured productivity by the time their workers spent without regard to what those workers created. The standard invites inefficiency, not to mention fraud. The potential for conflicts of interest is obvious—it's in the firm's financial interest for lawyers to spend as many hours as possible, while the client's interest is best served by limiting the time spent.
Confronting
Civil Discovery's Fatal Flaws
by John S. Beckerman
In discovery, a Rambo lawyer's favorite strategy is "to give as little as possible so [your opponents] will have to come back and back and back and maybe will go away or give up," as one unusually candid lawyer responded to Magistrate Judge Brazil's 1980 American Bar Foundation study of attitudes of lawyers in Chicago. Indeed, there is a much greater chance that the adversary will eventually give up and go away than that most courts will ever issue effective sanctions against Rambo lawyers.
On Being a Happy, Healthy
and Ethical Member of an
Unhappy, Unhealthy and
Unethical Profession
by Patrick J. Schiltz
The profession that you are about to enter is absolutely obsessed with money. "[M]oney is not just incidental to the practice, but at its core." Money is at the root of virtually everything that lawyers don't like about their profession: the long hours, the commercialization, the tremendous pressure to attract and retain clients, the fiercely competitive marketplace, the lack of collegiality
and loyalty among partners, the poor public image of the profession, and even the lack of civility.
Committee on the
Profession and the Courts
by Judge Louis A. Craco et al
Clients, practitioners, judges and ethicists all expressed serious reservations regarding the current disciplinary process ... These concerns are real, and they give rise to the perception, no less damaging by virtue of being a perception, that the profession is unable or unwilling to regulate itself.
ABA Commission
on Billable Hours Report
American Bar Association
Every legal project has an intrinsic value to the client. The value may be greater than a fee based on the total of the hours billed. Or the value may be less. More importantly, with hourly billing the client does not have the information necessary at the outset to evaluate whether to or how to pursue a matter. Hourly billing often produces a result that is unfair to either the client or the lawyer. In some cases it may not be fair to either.
The Billable Hour Must Die
by Scott Turow
But at the end of the day, my greatest concern is not merely that dollars times hours is bad for the lives of lawyers - even though it demonstrably is - but that it's worse for clients, bad for the attorney-client relationship, and bad for the image of our profession. Simply put, I have never been at ease with the ethical dilemmas that the dollars-times-hours regime poses, especially for litigators.
Cisco General Counsel on
State of Technology in the Law
by Mark Chandler
Put most bluntly, the most fundamental misalignment of interests is between clients who are driven to manage expenses, and law firms which are compensated by the hour ... Winners will be those who are able to standardize services to meet clients' cost management and predictability needs where very good is good enough.
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Many Questions, Little Change
Why is civil litigation so expensive? Are lawyers accountable to clients, and the courts? How effective is the legal profession's practice of self-regulation? Why are innovation and productivity improvements so limited? These and related questions have been discussed extensively within the legal literature over decades. Consider a few of the titles:
- The Hours: The Short, Unhappy History of How Lawyers Bill Their Clients
- Confronting Civil Discovery's Fatal Flaws
- On Being a Happy, Healthy and Ethical Member of an Unhappy, Unhealthy and Unethical Profession
- The Billable Hour Must Die
Hundreds of thoughtful studies regarding billing, civil litigation abuse, client and lawyer dissatisfaction and the need for change have been written. Yet, little has changed. Why is that?
Hourly Billing
"Who ever says to a client that my billing system on its face rewards me at your expense for slow problem solving, duplication of effort, featherbedding the workforce and compulsiveness - not to mention fuzzy math?"
The Billable Hour Must Die
Scott Turow
Law's unrelenting pressure to bill hours is largely due to the practice of leverage, or the expansion of law firm partners' income through the use of associates and paralegals to generate hourly billings far beyond that possible by a single partner. Many believe this continuous push to increase billable hours has corroded the profession's efficiency and ethics. An American Bar Association report on hourly billing bluntly states:
"Normally, the client's interest is to resolve the matter or project efficiently and quickly. If hourly billing is utilized, the efficient and quick lawyer will earn a lower fee than an inefficient and slow lawyer. Because of this, hourly billing fails to align the interests of the lawyer and client, and under many circumstances puts their interests in conflict."
An industry that fails to align its interests with its clients rewarding inefficiency and prolongation over efficiency and dispatch is based on a fragile foundation indeed. Ultimately, it must change, or be changed.
Insufficient Judicial Oversight
"If the federal judiciary were a Chicago law firm, with 1,362 lawyers it would only be the fifth largest in the city, about the size of Kirkland & Ellis. And at an average salary of $158,600 would quickly lose its legal staff."
A Call for Legal Entrepreneurship
Self-enforcement of the Rules of Civil Procedure by attorneys under litigation and financial pressures often does not work. Discovery, meant to be an objective "search for the truth," is too easily abused through delay, obfuscation, intimidation and manipulation. These issues have been documented in the literature for decades as a 1980 study of Chicago litigators attests:
"Most attorneys still see discovery as a game and play it to the hilt to avoid disclosure...Unless judges take a strong stand no one will quit playing games because you know you can get away with it."
With so many calls for their closer involvement, why haven't our courts accepted the challenge? Two key reasons. Our adversarial system tends to delegate judges to a passive role in contrast to Europe's inquisitorial system, and our courts' resources are minuscule compared to litigants'.
Limited True Competition
"When law gets standardized, it can be out-sourced, co-sourced, integrated, aggregated, syndicated and shared. One-to-one consultative advice gives way to one-to-many information services. And the client becomes empowered."
Cisco General Counsel on the State
of Technology and the Law
Mark Chandler
The nation's top 200 law firms generate over $100 billion in highly-profitable revenues, yet aren't a truly competitive market - a market boiling with innovation, price competition and regular challenges to the status quo. Why is that?
- Few means exist to compare legal services. The Internet has brought transparency to travel, automobiles, real estate and other markets lowering prices and raising productivity. That is yet to happen in law.
- Many users only occasionally need legal services. Not knowing how to evaluate alternatives, many become poorly informed consumers.
- Business often fails to manage law like other costs. Standard business practices such as project management and cost analysis often are not employed.
- A sense of community prevails among lawyers. Corporate lawyers often view outside lawyers as peers in sharp contrast to professional purchasing agents' view of vendors.
- Law's business practices inhibit change. Hourly billing, confidentiality and legislative access has limited innovation, transparency and regulatory oversight.
- Non-lawyers are restricted from owning law firms. Change often comes from outsiders. In law, outsiders are not allowed.
"Clients: It's not hard to find examples of aggrieved fee-payers ... What makes it different is that the clients are armed with information dangerous to the status quo. One of the unintended consequences of electronic billing is that clients can now easily compute and compare costs of tasks."
The American Lawyer
December, 2007
Successful entrepreneurs won't be discouraged by these issues, but consider them the seeds for new business opportunities.
But the task is not for the faint-hearted. Industry practices are deeply entrenched. Law is conservative and precedent-based; unlike technology and consumer markets there are few early adopters. These many barriers have discouraged outside investment. But from an entrepreneur's perspective, law can be viewed as an isolated valley, historically remote to outsiders but verdant in its possibilities. A valley in which few fields have been cultivated in contrast to so much of high-tech, bio-tech and other highly capitalized markets whose grounds have been plowed repeatedly.
© 2012 Vallex Investments, Inc.
All rights reserved.
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