Saturday, April 05, 2008

Cal Bar Prez Takes Aim at Billable Hours

Jeff Bleich, former Boaltie and current President of the California State Bar disfavors billable hours.  He recently offered up some compelling reasons for is position, in what the WSJ Law Blog dubbed a "manifesto" calling for reform.

First, Bleich offers a professional angle . . .

Lawyer/author Scott Turow has captured this conflict well by describing what a truly candid disclosure to a client might sound like: “If you hire me, I promise that my billing system will reward me for solving your problems at the slowest possible pace, with as much duplication of effort as possible, and where I will face economic penalties for exercising any judgment that limits or focuses our work. I will, under this system, have strong incentives to embrace any opportunity to engage in discovery wars where the work is the easiest and the financial rewards are the greatest. And you can be assured that every member of my team will have a real financial inducement to exaggerate the amount of time they devote to every task.” . . . The problem with this system is that even if lawyers are not corrupted by it, it still casts a shadow over the choices we made. 

Second, he offers a human resources angle . . .

Young lawyers have fewer client contacts, less ownership of a case and fewer opportunities to actually solve a problem. As they advance, they aren’t asking the questions that will allow them to one day lead their firms and the profession: what experience am I getting, what sorts of colleagues are we developing, what is our culture and philosophy? Instead they think more and more about profit targets, hours targets and what their exit strategy is.

I sympathize. The number of hours spent on a project is perhaps an indicative, but hardly a conclusive, measure of the work's quality. On the other hand, I'm not sure I can think of a better incentive structure.

And for that matter, Bliech might not be able to think of one either: he suggests 1700 hours (as opposed to 2100) is a more reasonable number . . . and . . . yet . . . according to NALP . . . his own lawyers at Munger, Tolles & Olson appear to clock in at around 2000 hours!

To point that out may have been a cheap shot on my part, because Bliech only one of many partners in his firm. But it underscores part of the problem -- a big reform like Bliech proposes seems unlikely to emerge from within the BigLaw community itself. That has nothing to do with the merits of the proposal. It has to do with whose interests the present scheme serves.

Think: clients partners in law firms.



Blogger McWho said...

As long as people are willing to pay someone per hour to do work, I see no reason for that person to change how they operate. Being paid by the hour is awesome, and firms know that.

Which is why they don't pay their associates per hour, bonuses aside.

4/05/2008 4:57 PM  
Anonymous Anonymous said...

Sort of related to pay per hour... Was everyone clear that our tuition will rise $4000 in the fall to $30,900? I was under the impression that the steep increase would come in 2009-10.

4/05/2008 10:56 PM  
Blogger McWho said...

Both are true, because after the 4k increase it will increase 10k to around 40k, if I'm not mistaken.

4/06/2008 8:59 AM  
Blogger Patrick said...

This is tenuously related to this thread, if at all, but today I read an insightful piece at a Canadian blog on attorney recruiting in North America, both of students and lateral hires.

4/06/2008 1:31 PM  

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