By: Ronald M. Martin
First published in the
American Bar Association
Law Practice Management Magazine
April 2002
The billable hour has resulted in a set of rules that hurts our clients and our practices. I call these rules the Profession Killers: (1) the longer it takes to do the work, the more we are paid; (2) the more bodies we throw at a matter, the more we are paid; and (3) the more inefficient we are, the more we are paid.
Which of these Profession Killers benefits the client? None. Which of these rules benefits the profession? Let’s take a look.
On the Macro Level
Mega conflict of interest. In law school we learned that contingent fees could cause a “conflict of interest” because the lawyer might want to settle the case when it wasn’t in the client’s best interest. What a joke. At least with contingent fee cases, lawyer and client are on the same side of the table. The Profession Killers guarantee that lawyer and client will never be on the same side.
Hatred of the profession. We try to figure out why lawyers, such wonderful and bright people, are held in such disdain. We come up with creative answers like these: “It’s because of our power.” Lawyers, you see, hold most of the important jobs in the world and people naturally hate those in power. Or, “It’s because of the few evil lawyers.” A few evil lawyers have gotten a lot of publicity. If we could only find them and drum them out of the profession, everyone would love us.
Client actions. Frustrations with the legal profession have risen to such a level that, according to Strategic Review and Outlook for the Legal Services Industry 2001, from BTI Consulting Group, less than 25 percent of Fortune 1000 companies believe they are getting satisfactory client service. Instead, they believe they are getting everything from amorality to outright fraud from their lawyers. In response, clients are using fee audit procedures, sophisticated software, budgeting and billing techniques that micromanage lawyers in the belief that, if they force enough detail on the profession, it will somehow inhibit the Profession Killers.
And more corporations-ones we all would like to represent-are moving to the “DuPont Model,” narrowing the number of law firms they deal with and, at the same time, establishing trusting relationships to get the service that they want. Oh, there is one other thing. These companies are clear that they do not want to do business based on the hourly rate. Take a look at LawPartnering.com, where top companies are banding together to lead the way out of the Profession Killers.
Court system consequences. Given the incentives that exist in the billable hours system, it is just too expensive to resolve disputes in the courts. The result is outcry for alternative dispute resolution and, in many parts of this nation, for a parallel judicial system that can resolve disputes more quickly and thus more economically.
On the Micro Level
Here comes into play what may be called the Fourth Profession Killer: The harder we work, the more money we make, the more unhappy we are. At 1,700 billable hours, a lawyer still has enough time for family, relaxation and rejuvenation. But as we work more hours over that baseline, we take away time from other things-the things that give us the most pleasure in life. Is it any wonder that we see lawyers suffering from alienation, addiction and depression? With the billable hour, the only way to make more money is by selling off parts of your personal time, family life, psychic peace and physical health.
What’s the Prognosis, Doc?
Is there any chance of resuscitation? The odds aren’t good when the truth continues to be ignored, misdiagnosed, denied and rationalized. Instead, everyone is on a sprint to milk the cow before the herd disappears.
To improve the odds, we must move to the same side of the table as our clients. We must be as efficient as possible-as “lean and mean” as our best clients. The profession also must find the courage to walk away from the easy and wrong solutions. But don’t wait for the profession to sort itself out. Get it right in your firm. If your firm can’t get it right, you get it right anyway.
Ronald M. Martin (martin@hollandhart.com) is Strategic Planning Partner of Holland & Hart in Colorado Springs, CO, and a member of the LPM Editorial Board.
