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IBA: Climate Changing the Billable Hour

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A survey recently released by law firm management consulting company Altman Weil reports a clear consensus emerging among US law firms on changes in the profession. Over 75% of firms surveyed indicate that they believe that more price competition, more non-hourly billing and the use of project management to improve efficiency of service delivery will be permanent changes in the legal landscape.

“The primary impact on law firms of the recent recession will be a greater focus on efficiency and productivity driven by client demands for cost control,” said Altman Weil principal Tom Clay. “But most firms are still in the early stages of figuring out how to successfully institutionalize those changes in their organizations.”

The majority of law firms do not expect the changes to negatively affect their bottom line. In fact, only 27% of those surveyed believe that lower profits per partner will result.

The survey reports that 94.5% of law firms offer some alternative fee arrangements (AFAs), and all firms with 150 or more lawyers do so. The majority of firms indicate that their use of AFAs is primarily in response to client requests, rather than as a proactive strategy. Additionally, half of all firms say their fee arrangements are either less profitable than matters billed hourly, or they’re not sure how they compare.

When asked about tactics employed to implement AFA programs in their law firms, 80% report they require centralized approval for AFAs; 61% use cost analysis to determine fee structures, and 45% have AFA Committees. However, less than a third of firms track profitability outcomes, feature fee options in marketing communications, provide project management training, or set annual targets for AFAs.

“We’re seeing some systemization, especially in larger firms, but there is a long way to go before alternative fee programs are business-focused and profit-driven rather than being seen as concessions to clients,” Clay said.•

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  1. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  2. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  3. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

  4. Duncan, It's called the RIGHT OF ASSOCIATION and in the old days people believed it did apply to contracts and employment. Then along came title vii.....that aside, I believe that I am free to work or not work for whomever I like regardless: I don't need a law to tell me I'm free. The day I really am compelled to ignore all the facts of social reality in my associations and I blithely go along with it, I'll be a slave of the state. That day is not today......... in the meantime this proposed bill would probably be violative of 18 usc sec 1981 that prohibits discrimination in contracts... a law violated regularly because who could ever really expect to enforce it along the millions of contracts made in the marketplace daily? Some of these so-called civil rights laws are unenforceable and unjust Utopian Social Engineering. Forcing people to love each other will never work.

  5. I am the father of a sweet little one-year-old named girl, who happens to have Down Syndrome. To anyone who reads this who may be considering the decision to terminate, please know that your child will absolutely light up your life as my daughter has the lives of everyone around her. There is no part of me that condones abortion of a child on the basis that he/she has or might have Down Syndrome. From an intellectual standpoint, however, I question the enforceability of this potential law. As it stands now, the bill reads in relevant part as follows: "A person may not intentionally perform or attempt to perform an abortion . . . if the person knows that the pregnant woman is seeking the abortion solely because the fetus has been diagnosed with Down syndrome or a potential diagnosis of Down syndrome." It includes similarly worded provisions abortion on "any other disability" or based on sex selection. It goes so far as to make the medical provider at least potentially liable for wrongful death. First, how does a medical provider "know" that "the pregnant woman is seeking the abortion SOLELY" because of anything? What if the woman says she just doesn't want the baby - not because of the diagnosis - she just doesn't want him/her? Further, how can the doctor be liable for wrongful death, when a Child Wrongful Death claim belongs to the parents? Is there any circumstance in which the mother's comparative fault will not exceed the doctor's alleged comparative fault, thereby barring the claim? If the State wants to discourage women from aborting their children because of a Down Syndrome diagnosis, I'm all for that. Purporting to ban it with an unenforceable law, however, is not the way to effectuate this policy.

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