The Business of Lawyering -- the Billable Hour Model is Unfair to the Client

"The Business of Lawyering Is To Solve a Client's Problem. Period."

I was reading some fellow bloggers' posts from last month (see Matt Homann's The [Non]Billable Hour, and Richard A. Hall's Managing the Business of Law) regarding the fallacy of the billable hour model employed by the majority of "biglaw megafirms" and was reminded once more why I got into this business in the first place: to solve my client's legal problems.

Most lawyers do not realize that the business of lawyering means finding ways to solve their clients' legal problems. Clients expect two things from the relationship with their law firm: quality and value of legal services. If such a relationship is to thrive, these expectations must be understood from the client's perspective rather than the lawyer's. Therefore, from the standpoint of the client, legal services should: (1) Solve the client’s problems, (2) Be timely, (3) Be cost-effective, (4) Recognize that the justification for the existence of lawyers is to serve their clients, not the stopwatch, and (5) Include copious amounts of lawyer-client communication.

“You Pay for Results, Not Time.”

As Mr. Hall alludes to in his post, "counting hours has absolutely nothing to do with serving the client, and everything to do with serving the firm." One of the major complaints against lawyers is that they charge too much for their services. With the billable hour model, the complaints about high legal costs are, in reality, a subtle criticism that lawyers are inefficient, unproductive, and lacking incentive to minimize the time spent on a matter because it would diminish the fees they can charge. More importantly, a client who chooses a "billable hour" law firm must accept all of the risk of legal performance, including how efficient a lawyer chooses to be in accomplishing a legal objective.

For the past several years, I have asked the question “does the monthly billing model (based on the time a lawyer spends on a matter versus results), represent the best way to establish the value of legal services?” From most attorneys’ viewpoints, billing a client every month based upon time spent may seem appropriate and advantageous. However, from the client’s perspective, he or she is not buying a lawyer's “time” as a commodity; rather, clients want favorable solutions, results and benefits. Moreover, any billing method that does not depend exclusively on time spent as a measure of value can only motivate the lawyer to work more efficiently towards resolving the legal matter in question. A results-driven legal fee billing approach distributes risk in a more justifiable pattern to both attorney and client. The client is thereby enriched by the accomplishment of his legal objective and the attorney benefits from compensation duly earned through performance and not by the hubris of the ticking clock.