Gruntled Employees

In-house counsel's biggest headache

We spend a fair amount of time whaling on other law firms for things like hourly billing. But when a firm turns out a product that's valuable and useful, we want to make sure the firm gets its due. Ginormous (which should be a word) international law firm Fulbright & Jaworski released its Fourth Annual Litigation Trends Survey Findings last week, containing 52 pages of illuminating and actionable information generated by in-house counsel. Fulbright had an independent research firm survey 253 US corporate counsel and 50 UK in-house lawyers on everything from litigation costs and billing trends to regulatory matters and class actions. And what did in-house counsel report to be their leading legal headache?

(Wait for it ...)

Labor and employment cases.

Surprised? We're not. Oh, sure: securities litigation and patent litigation and class actions get more airtime. But every company has employees. (In a word: duh.) And if you have employees, you have employment issues.

According to the survey, 51% of respondents listed labor and employment matters as one of their greatest litigation concerns. Contracts was next at 41% (and some of those no doubt include things like noncompetes and nondisclosures). Regulatory matters (24%), securities litigation (22%), and intellectual property (also 22%) rounded out the top five of 16 categories (including "other").

Similarly, when asked about pending litigation matters, 43% cited labor and employment cases as among the three most common types. Contracts (34%) was the only other category to crack the litigation Mendoza line (20%).

At a time when many large law firms are scaling back their labor and employment departments, this area continues to keep corporate counsel awake at night. Hmmmm ...

There's a ton more data in the survey, which will likely lead to a few more posts on this site. In the meantime, you can get the survey findings free directly from Fulbright by clicking here. (You have to give up some contact information, but I think it's a fair trade.) You can then check out the detailed data here. Fulbright has a detailed press release and summary here.

Other blogs have also written about the survey. Check out Manpower's Mark Toth's entry here, Carolyn Elefant's post on Legal Blog Watch here, and Holden Oliver's piece in What About Clients? here.

As always, the moral is that lawyers should listen to their clients.

"Beat the clock": The Boston Globe on hourly billing

Busy, busy, busy. I know. I hate it when bloggers make excuses about why they haven't posted in a while. But we've been very busy at my firm lately. (So busy that I missed noting Gruntled Employee's first anniversary, September 28.) Why so busy?

Because we abandoned hourly billing.

In fact, during 2007, Shepherd Law Group has billed exactly 0.0 hours. And in doing so, we've more than doubled our revenue compared to last year. Clients don't really want to hear about our revenue, but if they think we're doing something to make less money, they immediately get suspicious. (Fear not, good clients. We're still capitalists.)

Our revenue growth comes from two sources: new clients fed up with the value-insensitive system of hourly billing, and increased efficiency driven by our flat-fee system. Our up-front pricing places our interests squarely aligned with our clients' interests, which makes them happy and forces us to be more efficient.

But don't take my word about it — I've already written many posts on the subject of hourly billing.

Instead, check out this article from today's Boston Globe. Sacha Pfeiffer, the Globe's world-class legal-business reporter, profiled our firm and its campaign to kill the billable hour. Whatever I could tell you, she says it better. And the article has kicked off a huge discussion. As of day's end, the story had been emailed via the Globe's site, Boston.com, 674 times (surprisingly, only once by me). That was more than four times more than the story of the Red Sox sweeping the Angels in the ALDS, and third-most for the past week.

In the blogosphere, people are discussing the article and the model. Here's a sample:

• Ron Baker's Verasage Institute, "Another Trailblazer: Shepherd Law Group"
• Susan Cartier Liebel's Build a Solo Practice, LLC, "The Billable Hour "Cockroach" is Being Snuffed Out....One Law Firm At a Time"
• Law School Dilettante, "I really shouldn't be thinking about jobs yet"
• Andrew Perlman, Legal Ethics Forum, "Billable Hours — A story and a question"
• Marie S. Newman, Out of the Jungle, "A trend in billing?"
• and, more acridly, Drew Curtis's news aggregator Fark.com with 122 comments and 10,135 clicks as of midnight.