Cravath Swaine & Moore Killing the Billable Hour?
Evan R. Chesler is a Presiding Partner at Cravath, Swaine & Moore LLP. He has offered his thoughts via Forbes in a piece called: Kill The Billable Hour. There is no suggestion that he is articulating a new policy for the entire firm but he is clear on his own views and given that he is the presiding partner, his words may very well represent some strategic thinking within the firm.
Here are some excerpts from Evan R. Chesler's views:
"I bill by the hour... This needs to be fixed. Yes, you read that correctly."
"Clients have long hated the billable hour, and I understand why."
"So what am I proposing? For reasonable periods of time during the life of a lawsuit, say three months at a time, I should... identify the client's objectives, measure, calculate, build in a contingency and come back with a price. Once the price has been agreed upon, the billable hour should be irrelevant.
PUNCHLINE: Evan R. Chesler is not the first lawyer to understand this. Visit the firm founded by awesome litigator Patrick Lamb and you'll see he and his partners have been living without the billable hour for some time at Valorem. Are Evan Chesler and Patrick Lamb (and those few who think like them) right? My money is on YES - the proof will be how sophisticated clients vote with their choice of counsel.
Patrick Lamb
Photograph of Evan Chesler by Fred Marcus Photography as it appeared in the referenced Forbes article. Image of Patrick Lamb (with hammer and clock) from the Valorem firm's website.
Read the entire Evan Chesler story here: Kill The Billable Hour and visit Valorem here and Cravath, Swaine & Moore LLP here.
Hat tip to Larry Bodine's ListServ for alerting me to the story.
I would love to see more client-centered, project based billing.
Billing by time doesn't take adequately into account the time spent researching, culling information, discussing strategy, and all the other parts that go into a lawyer's work beyond drafting a document, letter or making a few phone calls, let alone Court prep and litigation. But in reality, you are going to need a mixed model that you can justify; some things should have a fixed rate (especially if you have, say, pre-prepared boilerplate contracts you are simply altering for a client, taking very little work) while for others, hourly may be a decent measure of "how hard" we work. That makes a more complicated fee structure, but in this age of transparency, it may be the best way to show ROI for services rendered.