Saturday, March 30, 2013

It's more telling when someone who's been a partner at a major law firm complains about the billable hour than when an academic does it.

In yesterday's New York Times, Steven Harper made some very good points about billable hours (here) in light of the DLA Piper fee litigation (here and here).  I write about fees a lot (see here and here, and I have another piece coming out in a symposium issue of the Akron L. Rev. this summer).  My favorite part of Harper's opinion piece?
Lost in the furor surrounding one large firm’s current public relations headache are deeper problems that go to the heart of the prevailing big law-firm business model itself. Regrettably, as with previous episodes that have produced high-profile scandals, the present outcry will probably pass and the billable hour will endure. 

It shouldn’t. The billable-hour system is the way most lawyers in big firms charge clients, but it serves no one. Well, almost no one. It brings most equity partners in those firms great wealth. Law firm leaders call it a leveraged pyramid. Most associates call it a living hell. 
The fact is that billable hours create perverse incentives, because the way to make more money is to take more time or throw more humans into a project.  But billable hours evolved in part because the old way of billing ("$x for services rendered") didn't give the client a feel for how much work went into the bill.   If we want alternative billing to take hold, two things have to happen:  law firms have to figure out a way to calculate an alternative billing method that, at least on average, gives the firm a reasonable profit on its work, and law firms have to give clients some transparent information on what type of work they did on the client's matter.

One possibility is a flat fee that still records billable hours.  If the flat fee bears a reasonable relationship to the work done, then the client can see who did what, but the incentives for throwing bodies at a problem decrease.  The flat fee becomes a cap that controls costs.

The fear--and it's a legitimate one--is that many types of legal work involve unpredictable possibilities.  Let's say that a matter involves litigation.  Some of the expense of litigation involves responding to what the other side is doing.  So if one side is billing by the hour and the other side has a flat fee, then the flat-fee firm may well be held captive by the firm that is billing by the hour. 

On the other hand, major law firms are experienced in doing complicated work--and that experience is reflected in their billable rates.  If a firm is very experienced in, say, debtor-side chapter 11 work, then it can predict many of the actions that the other parties in the case may take.  It won't necessarily be able to predict the timing of those actions or their intensity (although, if it appears opposite those other firms all the time, it will have some idea of what they routinely do), but it has a feel for what's likely to happen in the case.  It's at least possible, then, that the experienced firm can establish a likely range of the fees and expenses that a matter might engender.  ("In the last several chapter 11 cases, our fees and expenses ranged from $x to $x+n.")

So perhaps flat fees might not work, but rough (and I mean "rough") budgets might act as a cap on a firm's choices for how to handle a matter.  Of course, some unpredictable events might make a budget inaccurate--but a firm can bring those unpredictable events to the client's attention and recalculate the rough budget accordingly.

The fact that a former Kirkland & Ellis partner is calling shenanigans on billable hours is significant.  Let's see how others respond to Harper's opinion piece.

Sunday, March 24, 2013

UPDATE: Bad customer service at Sheraton Suites Old Town Alexandria.

I stayed at the Sheraton Suites Old Town Alexandria this weekend, and let's just say that I'm more than disappointed.  I can live w/refurbishing that closes down all but one elevator for two days (hey, exercise!); I can live with a "print your boarding pass" area that doesn't print; I can live w/a hotel restaurant that only opens at 7 a.m.

What I don't want to experience again--and which is why I will never stay there again--is that even after I called Starwood Preferred Guest Customer Service--the hotel did not take the duplicate Internet charge off my phone.

History:  web site says "click here and, for just under 11 bucks, you can use all of your devices on this connection."  I click.  Wireless is very slow.  I use a wired connection.  Better.

Over the next two days, the wireless, and then the WIRED, connection slows to a crawl.

When I see my bill this morning, it had not one, not two, but three Internet charges for the first day.  When I complained to the front desk, the person there said that she'd take the duplicates off my bill.

When I checked out, I discovered that she'd taken one of the duplicates off but left the other one on.  When I complained, she told me that she couldn't do anything about it but that I was welcome to talk with her manager.  That'd be the manager that wasn't there.  So I left, mightily ticked off.

When I got to DCA, I called Starwood Preferred Guest Customer Service and explained what happened.  SPGCS told me that the folks at corporate would tell the folks at the hotel to take the duplicate charge off.  I was treated very nicely by the Customer Service person.

I just got the bill.  The duplicate charge is still there.  So I've posted a review on TripAdvisor, and I'm going to send SPGCS a copy of this post.

Let me ask you, Sheraton Suites, is an $11 charge--an improper charge--worth it for all of this ticked-off-edness?

UPDATE:  I just received a third invoice from the hotel.  Finally, the errant overcharge has been refunded.

Thursday, March 14, 2013

Oh, come on (with an update to a really good article about the rankings).

The students at the law schools that are calling for their deans to get fired due to changes in their USNWR ranks (see here) are exhibiting misplaced anger.  Most of the variables that go into the rankings are out of a school's control.  It's the faculty, not the dean, that will affect the reputational ranking, but the reputational score is based on such a flawed process (and small n) that it's ludicrous to blame the faculty for any reputational ranking problems, either.  Admissions?  Selectivity?  Schools pick from a pool of applicants.  They can't control the inputs.  If they have scholarship funds to lure folks away from other schools, great, but scholarship funds aren't infinite.  Bar passage?  Some of it's "us"--how and what we teach--but some of it isn't (whether someone studies).  Same with placement.  Some of it's "us"--are we sending well-trained, well-advised students into the job market?--but some of it isn't.  If students are calling for deans' heads because the deans lied about things like bar passage and employment statistics, I can understand their anger and frustration, and I share it.  If students are calling for deans' heads because they're sorry that they fell from x to x-10, then I'm not that sympathetic.  The USNWR numbers aren't an absolute value, they're relative, and relatively inaccurate, at that.  So law students who are gathering signatures to get their deans fired, you might want to think twice.

UPDATED 3/15/13:

And, for those law students scrambling for signatures on petitions, here's an extra thought:  take a look at this article by Professor Robert Jones.   He's done a very good job of discussing just how those academic reputation scores change--or don't--over time, and he suggests four interesting changes that might make those scores slightly less easy to "game."  Of those four suggestions, my favorite one's the last one, where he echoes Brian Leiter's call for an online survey that includes objective data about each school. 

Tuesday, March 12, 2013

A template for law schools' press releases, now that the USNWR rankings are in.

Well, the rankings are out, and the annual "let's figure out what to say in our press release" dilemma begins.  Here's a template for some law schools to consider.
Dear [stakeholder or possible donor]:

We are pleased to tell you that our law school ranking [increased more than we expected] [increased a negligible amount, but we're going to tout the change as if it were huge] [went down far enough that we've called in sick for the foreseeable future] [went down a negligible amount that will provide us with a disproportionate amount of grief for far too long] [stayed the same].

We are, of course, the best school in [the country--if we're Yale] [the region] [the state] [the city] [the part of the city in which we are located].  Our quality is reflected by [our reputational ranking] [our admissions numbers] [our placement rate] [our bar passage rate] [the ability of our marketing people to think creatively].

Even though we're [superb] [excellent] [very good] [really, really decent] [surprised that we're still here], we have committed to doubling our efforts to [track down unemployed alumni on various social media sites so that we can fill in the now-less-easy-to-cheat-on placement statistics] [rethink our curriculum in changing times] [write imaginative press releases that make us look as if we're moving in the right direction] [figure out how to steal budget money from other units on campus].

We thank you for your support, and we look forward to giving you even better news next year.
Of course, it's easier for me to write a post like this one given that we did just fine in the rankings.  But some of the press releases that are pouring in are just too funny to ignore.

Tuesday, March 05, 2013

Darn it! I missed National Grammar Day.

Yep:  apparently March 4 is National Grammar Day.  I missed it, but I sure love these two posts:  here and here.  I am someone who surreptitiously erases the mistaken apostrophe from chalk menu listings.  I'm even someone who's been known to write to major newspapers to chide them for bad writing (and bad proofreading).

But I'm experiencing my comeuppance:  right now, I'm dealing with a first round of edits from a good law review that is determined to make my writing style much more formal.  The editors have taken out every single contraction.  (I'm putting every single one back in--which has taken me several hours so far today.) So, in honor of National Grammar Day (a day late), my reaction to my current page proofs:
Dear Law Review Editors from Every U.S. Law Review:

Please let your authors use their own writing styles.  Please do not hew to the mistaken notion that your authors must use clunky and unnecessarily formal writing in order for your law review to be taken seriously by its readers.  All you're doing with these nitpicking edits is ticking off your authors.  Our names are on our articles, not yours, and trust me:  we know how we write, and we like our writing enough to do it for a living.  When you've written for a living for over two decades (three decades, in my case, if you count the time before I entered academia), you'll understand how we feel. 
I've decided that, in every new publication contract, I'm going to insert a provision barring the law review editors from removing my contractions or changing my writing style.  Enough is enough.

Now, go check your commas and apostrophes to prepare for next year's National Grammar Day.