Tag Archive: billing

Innovation Does Not Occur in a Year

Getting paid by the hour stresses us, according to Frank Partnoy. He says that "(i)nnovation doesn’t occur in a year or a quarter—and certainly not an hour. So why measure work in too-brief increments?"

This is a novel rationale for moving toward the fixed or flat fee billing concept and away from hourly billing. During the 25 years of my law practice, I remember how stressed I was, always seeking to make sure that I had accounted for my time … and correctly billing my clients. During the last 23 years of coaching and consulting …. and only flat/fixed fee billing, I’m focused on my clients’ condition and how I can improve it, not on how much time it takes me to do so. As Partnoy says, "Clocks and calendars are not going to change — so it is up to us to try to get off the clock, especially when we find ourselves watching it." (See Parnoy’s "Wait: The Art and Science of Delay.")

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Law Practice Management Institute

The Law Practice Management Institute raised a number of issues and produced great discussion among the attendees.  Some of the issues in the first day were:

  • Creating a marketing plan is important for success
  • Alternative fee structures and billing modalities opened possibilities not previously considered
  • Sending a satisfaction survey to clients helps maintain and build the relationship as well as provide a defense against malpractice and disciplinary complaints
  • Guaranteeing satisfaction with the service of the law firm will reduce the hesitancy of many clients to engage your firm
  • The statistics of why clients leave their present firm and why they refer their present firm to their friends and colleagues was an eye-opener.
  • Always put yourself in the shoes of the client and seek to understand, and avoid, what makes the client unsure and/or angry about your service.


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Lawyers again chastised for their billing!

 In a December issue of the Wall Street Journal, the headline implies that lawyers are making far too much money in a Delaware case. This, despite the unheralded reduction in their fee request. But, it’s easy too trash lawyers, and good headline writers (a special art in writing) are brilliant in getting readers to pick up the paper and keep reading …

 But, let’s look at the facts:

 First, the judge in the case said that the plaintiffs lawyers did an outstanding job, not just good, and such work should be rewarded. This is the same judge who historically penalizes lawyers when they fail to get results.

 Second, the agreement between plaintiffs’ lawyers and plaintiffs permitted counsel to ask the court for 30% and they applied for less, only 15%, not a normally outrageous percentage.

 Third, the risk reward element of contingency cases should be evaluated as of the beginning of a matter. And in this case, the risk of no recovery was substantial. Victory was, by no means, assured. Monday morning quarter-backing is always performed by those who have a corporate bias, have no interest in the matter and just want to carp, are jealous or, worse, feel  that lawyers should be heard, not seen. Reminds me of the criticism against lawyers who sued Ronald Reagan, as governor of California. Despite the fact that the lawyers won most, if not all, the lawsuits brought against the abuse by the State, neither the facts nor the victories was much discussed by those with a political agenda.

 Last, these arguments that the lawyers’ hourly billing rates were too high fly in the face of value billing, the new wave for corporate America. In other words, the results in this case were based on the value to the clients resulting from the effort and skill of the lawyers. In most cases, hourly billing results in higher legal fees … fees unrelated to the value received by the client … and fees that created certainty in the cost of the legal proceeding, an important factor to clients in most matters.   It’s important to know what the legal cost will be before embarking on a matter. Value billing provides this.

 Thus, the criticism offered by the writer in the WSJ is off target, to say the least.  Most criticisms against legal billings involve the hourly billings … here, value billing was requested by the lawyers and their clients and approved by the court. Hoorays should have been the proffered by the writer, not whining.

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