When the shop-worn billable hours topic emerges from legal publications and goes mainstream, you have to take notice.
Today’s Washington Post clocks it rather well, in an article written by Dion Haynes (Another excellent article by the same writer that mentions what Howrey has done in response to client demands is here). An excerpt:
New efforts to jettison hourly billing are being driven by in-house corporate lawyers, who say they have grown frustrated seeing fees to outside firms soar even as they slash their own costs. They said they want more certainty in their legal budgets and worry that outside firms are spending unnecessary amounts of time on their matters.
The article goes on to mention the Value Challenge of the Association for Corporate Counsel; this subject is certainly on the agenda at ACC’s annual meeting, being held this week in Seattle.
More from the Post:
In a recent survey conducted by the Arlington-based Corporate Executive Board, a for-profit organization that does research on best practices, 800 in-house lawyers said they spent 50 percent more last year on large outside law firms than in 2002. They said the hourly rates they paid jumped 70 percent between 1996 and 2005.
Sort of like Moore’s Law in reverse; there’s an interesting graphic showing 2006-2007 median legal spend trends here.
Heck, even Simpson Thacher is doing so-called “bailout” work for the Treasury on a fixed-fee basis.
It will take GC and in-house leadership for change to take place.
However, law firms thinking that this is somehow a financial meltdown related dust-off of the billable hours banner may find themselves surprised down the road.
