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« Employee satisfaction for $2.40 a day | Main | Cheaper than A-Rod: Some lawyers getting $1,000 an hour »


Frank Roche

Jay, that hourly fee issue is prevalent in big consulting firms, too. When we started our firm 4 years ago, we committed to working by the project. That way we didn't end up with "consulting prostitution." I think it's good for clients and good for us.

I used to hate big consulting, where billing rates for partners were running north of $700/hr and even the kids were being charged out at $250/hr, and the whole trick was to pump up billable hours. Know how to do that in consulting? Just write down an hour everytime a client calls. Yeah, I know it's unethical, but that's what people were doing. LOTS of people. Need to get 1,500 billable hours? Easy. And the clients paid, for some stupid reason.

If I were a client, and a consultant (or lawyer) told me it was all about hourly rates and it was open ended, then I would have to walk. There is a better system: Project-based fees.

Really good article...thanks for that.

david giacalone

Thank you for pointing to my posting on ethical billing, Jay. I am an "ardent defender" of the client's right to be charged reasonable and fair fees, and believe that lawyer fees are in general too high. Sometimes called Prof. Yabut or skepticalEsq, I am a born contrarian. I began defending hourly billing (when done in accordance with ethical and fiduciary duties) because its greatest and loudest detractors were selling alternative billing methods by telling lawyers that they could count on charging significantly higher fees to clients than when they billed by the hour. In addition, it is scandalously high hourly fee QUOTAS that are at the root of the problem, far more than the method of calculating the fees.

For me, the ethical and moral lapses or lawyers and law firms that cause virtually all billable hour problems will still exist under any billing formula -- with greed being the biggest problem. That is why my focus has been on assuring ethically-appropriate fees. To be honest, I think you are being far too glib and misleading (and self-serving?) by suggesting that hourly billing is inherently unethical.

As for my haiku, please be assured that I have received permission from each of the poets whose work is presented at f/k/a. Read "Yes, Lawyers and Haiku" to see why I think we are a good match -- .

Jay Shepherd

Frank: Thanks for the good words. It's helpful to hear that other professionals face the same issues that lawyers do. It doesn't matter what service you provide: if you bill hourly, the client gets screwed. I'll bet your clients really appreciate your firm's shifting the risk away from them and onto you, and I'm sure it's led to success for you. Keep up the good work. Thanks for the comment!

David: Wow. Glib, misleading, & self-serving. Sounds like the name of a law firm. And a Harvard Law guy calling me "glib"? I guess that makes me the kettle. As for the blog policy, I was poking fun at your esteemed institution's overlawyered policy language. I wasn't questioning whether you were stealing haikus (who would bother?). Anyway, keep up your blogging on the topic. Someone needs to defend the status quo. David, it's not about ethical and moral lapses or greed; it's about a system that places the client's interest directly opposite the law firm's. Thanks for the comment.

— Jay

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