Business of Law

Consultant Offers Demographic Reason to Abandon the Billable Hour

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The graying of the profession is a good justification for abandoning the billable hour, a law firm consultant says.

Lawyers tend to bill the most hours in their sixth and seventh year of practice, Altman Weil principal James Cotterman says in the consulting firm’s Report to Law Firm Management (PDF). After that, billable hours are typically on a downward trend.

Aging lawyers have been able to make up the difference by raising hourly billing rates, but that likely won’t happen in today’s economic environment. The billable-hours curve “does not play well in a profession that is aging and presents a demographic argument to abandon hourly billing,” he writes.

Law firms embracing alternative fees will need to move the focus from the time it takes to do the work to the client’s perception of value, Cotterman advises. “Clients will still bargain hard to achieve their top priority of reduced spending, and law firms will need to re-engineer how they do the work, but if done right, the benefits can accrue to those firms,” he says.

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