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Good Summer Beach Read? The Evils of the Billable Hour (a Classic)

June 18, 2012

If you are paying significant legal bills, you could do a lot worse for your summer beach read than this old classic.

Even though this report is a decade old, the ABA Commission on Billable Hours Report (2001-2002) still rings true in its analysis of the “corrosive impact of [the] emphasis on billable hours” by the legal profession.  The Report lists 15 intended and unintended consequences from this “overreliance on billable hours”:

  1. A decline of the collegiality of law firm culture and an increase in associate departures
  2. Discourages pro bono work
  3. Does not encourage project or case planning
  4. Provides no predictability of cost for the client
  5. May not reflect value to the client
  6. Penalizes the efficient and productive lawyer
  7. Discourages communication between lawyer and client
  8. Encourages skipping steps
  9. Fails to discourage excessive layering and duplication of effort
  10. Fails to promote a risk/benefit analysis
  11. Does not reward the lawyer for productive use of technology
  12. Puts client’s interests in conflict with lawyer’s interests
  13. Client, not attorney, is at risk for inefficiencies, training, and bill padding
  14. Itemized bills report mechanical functions and not value of progress
  15. Results in lawyers competing based on hourly rates

The majority of these factors explain why clients are so unhappy with the  billable hour model and why it can so adversely affect your bottom line.  While this ABA report is certainly not on most best beach reads top-ten list, any client who has substantial legal bills should find the time to read this eye-opening report.

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