Death to the Billable Hour?
This week, the Economist magazine speculates that the legal profession may soon witness an end to the billable hour, which it has lovingly dubbed the “Killable Hour.” According to the article, the cumbersome process of record-keeping and the added expenses transferred to clients may soon render the system obsolete. But, it cautions, it will be clients, and not firms, that will try the hardest to kill it off.
What are the alternatives? Some firms have moved towards a scheme of fixed-prices, with added bonuses contingent on performance:
“High-volume legal matters, which rely on precedents and templates, are the most obvious targets for fixed fees. Set prices can be put on anything from commercial contracts to trademark filing and personal-injury work.”
But, in other instances where the outcomes are more fickle, it may be more effective to blend fixed fees and hours worked. Another option is to take a segment of a settlement as a “bonus” and divvy it up within the firm.
How do you feel about killing off the billable hour? Please let us know in the comments below.
Source: The Economist