“I can’t think of a more important problem facing the
profession,” Justice Breyer told Washington Lawyer, “than
how to maintain a life for a young lawyer that will lead to satisfaction
in his or her career, that will produce time for a family, and will
produce time for some form of community and public service, whether
it’s the school board, whether it’s the trustee of a
museum, whether it’s going to work in Washington, or whether
it’s any one of 10,000 different kinds of community activities.

“The reason I got into this [issue] is, it seems to me, that
older people in the legal profession [have] a strong obligation .
. . to create a decent life for younger lawyers going into the firms.
More and more I hear from friends of mine who are in firms that the
pressures are such [that] there is no time.” Lawyers tell him, “We
don’t have time for anything.”

The root cause of the "problem" to which Justice Breyer alludes?   The
billable hour. 

In a cover
that spends 90% of its ink excoriating the "tyranny"
of the billable hour, and then concludes by throwing up its hands
at how improbable it would be for any alternative to be seriously
adopted, Washington Lawyer seems to encapsulate the received
wisdom on this topic.  "Can’t live with it, can’t live without
it."  Is that really the best we can do?

The economist in me has always been perplexed at the durability
of the billable hour model.  After all, it:

  • begins life based on "cost of production" rather than "value
    to client;"
  • rewards quantity over quality;
  • is premised on "tonnage," not innovation or creativity; and
  • creates an essentially undeniable conflict between efficiency
    and productivity (which clients are always in favor of) and revenue
    generation (which firms are always in favor of).

Then, of course, there’s the merely human toll.  The article
notes an associate who never even had time to get her home phone
hooked up, but my favorite (from real life) is of the first woman
associate to make partner at a firm where I used to work.  Nine
months pregnant, she worked a full Friday, delivered her child on
Saturday, took Monday off, and was back full-time on Tuesday.  Yes,
a maternity leave consisting of one day.  But she made partner.  However,
this blog, I will remind you again, is not about ethics, it’s about
economics; so the emotional and spiritual consequences of "targets"
(express or implied) of 2,000 hours/year and above are beyond my

Why, if it’s such a perverse creature, does the billable hour endure? 

  • Lawyers are risk-averse (did I say that?!—alert the media!)
    and the billable hour model guarantees work done will be compensated.
  • Looking at the same issue from the flip-side, quoting a fixed
    fee or a flat rate in advance risks ending up with uncompensated,
    unprofitable work—not
    to mention the blow to a partner’s self-esteem as a savvy businessman.
  • I personally believe there’s a certain Marine Corps Parris
    effect in play, although it may be hotly denied:  "We [partners] all billed outlandish hours to make it; now it’s your turn."
  • Finally, it has simply become the de facto standard, and frankly
    it’s a good gig for law firms.

To me, these reasons add up to one conclusion:  Firms aren’t
going to be the ones to change.  Clients are going to have to
make it happen.  (The article posits that law students will
also be a "pressure point," but I’m not buying that; who
wants to come off in an interview sounding like a wuss?) 

article ends with a whimper:

As the ABA Commission on Billable Hours concluded, “There
are no easy or clear-cut answers to developing successful alternatives
to the billable hour."

As they say, I respectfully dissent:  The answer—fixed
fees, or value billing—is staring us in the face.  We
in the profession are too smart not to do better.  As the article
drolly notes, even "plumbers and accountants" quote fixed fees.  (And
may I point out that firms that have the traction to pursue value
billing, a la Wachtell, are not exactly hurting.)  Are we that
insecure not to attempt the same?

But, you object, the value of legal counsel is ineffable:  Who
can put a firm price on it in advance? 

The short answer is that, everywhere else in our roiling economy, reasonable
people readily agree on "price" vs. "value."  And
I’m not just talking about haircuts and taxi rides:  Is deciding what’s
a fair price for a home (or, in my case a co-op apartment) simple?  Rationally,
there are almost too many factors to consider:  Location, layout,
neighborhood, condition, size, design, school district, property tax rates,
outdoor space, geographical orientation, "amenities," etc.  But
we quickly arrive at a gut feel, and the home market is highly liquid.

The market for legal services does not exist in its own sui
bubble exempt from all the familiar economic considerations
that govern other markets.  It is not a counsel of exceptionalism
to think it does, it is a counsel of despair.

Related Articles

Email Delivery

Get Our Latest Articles Delivered to your inbox +

Sign-up for email

Be the first to learn of Adam Smith, Esq. invitation-only events, surveys, and reports.

Get Our Latest Articles Delivered to Your Inbox

Like having coffee with Adam Smith, Esq. in the morning (coffee not included).

Oops, we need this information
Oops, we need this information
Oops, we need this information

Thanks and a hearty virtual handshake from the team at Adam Smith, Esq.; we’re glad you opted to hear from us.

What you can expect from us:

  • an email whenever we publish a new article;
  • respect and affection for our loyal readers. This means we’ll exercise the strictest discretion with your contact info; we will never release it outside our firm under any circumstances, not for love and not for money. And we ourselves will email you about a new article and only about a new article.

Welcome onboard! If you like what you read, tell your friends, and if you don’t, tell us.

PS: You know where to find us so we invite you to make this a two-way conversation; if you have an idea or suggestion for something you’d like us to discuss, drop it in our inbox. No promises that we’ll write about it, but we will faithfully promise to read your thoughts carefully.