Wednesday, June 15, 2011

An incredibly sensible post about billable hours and the reason(s) behind billing clients that way.

See here.

4 comments:

Jim Collins said...

Not sure which was more interesting - the article or the comments. There was certainly a wide range of thoughts there.
But it does pose an interesting question. Not being a lawyer, if I needed one, say for bankruptcy, would I be more interested in the hours my lawyer worked to justify the bill or if he or she successfully got me through the process with the least amount of pain.
I do contract work. I bill by the hour but I know other consultants in my field that bill by the project. Would it make sense for lawyers to bill by the case? Maybe not. It's relatively easy for me to control "scope creep." In a trial situation, I'm not sure a lawyer would be able to say, "Sorry, that's all you've paid for, we'll have to renegotiate this contract."

Nancy Rapoport said...

Thanks so much for your commment! And re billing by the case, check out paragraph three of today's WSJ story about Marty Lipton: http://online.wsj.com/article/SB10001424052702304887904576399641154337276.html. Talk about perfect timing, with your comment and this article.

Jim Collins said...

A very interesting WSJ article, Nancy. Thanks for the link.
Obviously charging by the case has worked well for them since it led the industry with profits per partner of $4.345 million last year.
I know that in talking with other consultants, charging by the hour generally will cost a client less. If they want to be billed by the case or job, I would have to estimate hours and then add a percentage to cover overtime and similar. I'm sure Wachtell, Lipton, Rosen & Katz follows a similar model. That may work for big business who can afford such things, I'm not sure it would be a good idea for the small or single lawyer law firm. Just paying the hourly cost is a big expense for many folks.

Nancy Rapoport said...

Thanks, Jim--yep, the more I think about things, the more I think that the worlds of BigLaw and "normal law" are different universes....