The WSJ article on hourly rates and real change
But let's not get to the point where we're mocking folks who are trying to move in the "right" direction. At one point you say you can't move from fish to fowl overnight, so don't mock the baby steps. Maybe right now they don't "get" that they need to squeeze out those 200 hours on every engagement, but aren't these steps in the right direction? All the writing I've read on shift to fixed fee billing suggests it's hard, and there will be missteps along the way. At some point, aren't these stories showing a glimmer of recognition?
From a comment to my post on the Wall Street Journal article on the billable hour.
If the steps discussed in the WSJ article are, in fact, in the right direction, the commenter is correct that these steps should be applauded, not mocked. After all, the journey of a thousand miles begins with a single step. Point well made and taken. So the question becomes, are these fledgling steps in the right direction?
It is, of course, impossible to tell at this nascent moment. After all, how does one look into a man's soul and know what he really believes. So I don't know, but I suspect, and would wager some real money on this (the lottery tonight is $250 million and I know I have the winning ticket), that what we are seeing from most of the firms identified in the Wall Street Journal article is window dressing.
Why do I believe this? First, there is incredible pressure on large law firms to get revenue in the door any way possible these days. Overhead has to be covered. So when you have people sitting around twiddling their thumbs, it no longer matters if they work at a comparatively low effective hourly rate so long as they are generating revenue. So it is economically easy to perform fixed fee work when the alternative is sitting around doing nothing.
Second, I don't see any structural changes in these law firms. Working under a fixed fee arrangement places a premium on experience, not body count. More time is worse than less time. You've got to put people through a re-education process: everything they have been taught to value suddenly isn't very important. People have to learn to evaluate risk--their own risk--on operate with a level of uncertainty they have never dealt with. Not only not easily done, but it cannot be done if a person is given one fixed fee assignment while they have other hourly rate assignments. Picture the spinning heads of the fembots in Austin Powers.
Third, people like Fred Bartlit and other experienced observers of the profession, for whom I have enormous respect, don't see real change here.
Last, I don't think one takes baby steps into a paradigm shift. You either are fish or you are fowl. You cannot be both. Having spent 25 years in firms laboring under the billable hour model, including 18 years at an AmLaw 100 firm, and now having spent almost 2 years at a non-hourly firm, that is what I believe.
Bottom line, when I see evidence of earnest change, I'll stop my mocking. Until then, I can't control myself.
