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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. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  2. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

  3. Pass Legislation to require guilty defendants to pay for the costs of lab work, etc as part of court costs...

  4. The fee increase would be livable except for the 11% increase in spending at the Disciplinary Commission. The Commission should be focused on true public harm rather than going on witch hunts against lawyers who dare to criticize judges.

  5. Marijuana is safer than alcohol. AT the time the 1937 Marijuana Tax Act was enacted all major pharmaceutical companies in the US sold marijuana products. 11 Presidents of the US have smoked marijuana. Smoking it does not increase the likelihood that you will get lung cancer. There are numerous reports of canabis oil killing many kinds of incurable cancer. (See Rick Simpson's Oil on the internet or facebook).

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