Billable Hours

Most lawyers loath the billable hour, and wish it would go the way of typewriters and book research.  Yet, despite sharing a near universal hatred for accounting time in six minute increments, there are those who claim that the billable hour will remain the predominant form of billing for the foreseeable future - despite the clamor from clients large and small to move toward alternative billing arrangements - and those few, happy warriors who find the billable hour structure so deeply flawed and inimical to delivering quality client service that they put pen to paper in the hopes that spreading their ideas will lead to a critical mass that will ultimately dismantle the billable hour once and for all.  

 John Derrick, a California appellate attorney, is firmly in the latter camp, as evidenced by a book he published in 2007 entitled Boo to Billable Hours.  As described by the publisher:

"The billable hour dominates the legal profession, but is eating away at its soul. It chills the attorney-client relationship. It penalizes efficient lawyers, while rewarding plodding ones. It leads to arbitrary, irrational, and suspect results, in which time is distorted and sometimes invented. It disconnects the amount that is charged from the value delivered. And it fails to produce what it promises, transparency. Its effects are all the worse in law-firm pyramids that impose excessive billing requirements. This straight-talking book critically dissects the practice of billing by the hour in the practice of law, examining how time is actually recorded in a variety of contexts that raise ethical as well as practical concerns. It also tracks the history of the billable hour, showing how we got to where we are today. The book is not all about criticism, however. It also advocates alternatives that shift the focus away from time expended and onto value delivered"

In the book, Mr. Derrick undoubtedly draws on his experience as an appellate attorney. Indeed, on his firm's website, Mr. Derrick states:

"I prefer to handle appeals and writs on a flat-fee basis, as opposed to charging by the hour. The scope of work in an appeal is more predictable than in pre-trial and trial work. Flat fees provide clients with certainty about the cost. And they enable the lawyer to develop legal theories in a creative way, without constantly worrying whether exploring certain avenues can be justified by the extra hourly charges. If you are concerned that flat fees will provide a lawyer with an incentive to do less work, then you are looking at the wrong lawyer. (emphasis added)"

In the current economic environment, lawyers are rarely in a position to reject work if the client wishes to remain on the clock.  Should the lawyer decide to keep the client, though, the lawyer should advise the client that the billable hour undermines the quality of an appellate lawyer's craft, which requires a significant amount of trial and error and the testing of a number of legal theories.  

By contrast, flat fees free the appellate lawyer to explore the nuances underlying the client's case and to create a highly polished work product.  This result can only be achieved through large amounts of time spent researching, writing, and editing, editing, editing.  Thus, appellate work requires time and lots of it.  A system that pressures appellate lawyers to spend fewer hours on their work will result in an inferior work product.

The profession is well-served by the John Derricks of the world, who move beyond the lament that billable hour pressure is a major source of lawyer unhappiness to make the more relevant claim that, above all, the billable hour is a central barrier to delivering superior client service.