It seems like everyone is taking issue with the Billable Hour these days (myself included!). I just finished reading Donalee Moulton’s piece in the Lawyers’ Weekly entitled “Is the Billable Hour Really Dying?“. Apparently, after decades of people complaining about the billable hour, there is now a push in the U.S. (led by the Association of Corporate Counsel) to do something about it.
Specifically, the Association of Corporate Counsel has started a Value Challenge that tries to reconnect value to costs for legal services between corporate clients and law firms through 3 steps:
- Redefining Value (resources and guides to assist the parties in their initial meeting, which includes a Covenant with Counsel template)
- Attending an Event (attend a local meeting to explore the issues raised by this challenge)
- Joining a Value Community (continue the conversation).
The media has touted this Value Challenge as something that requires the re-evaluation of the billable hour as the method by which legal services are valued. Michael Roster, Chairman of the ACC Value Challenge Steering Committee, was quotes as saying that the Value Challenge is based on the idea that “firms can greatly improve the value of what they do, reduce their costs to corporate clients and still maintain strong profitability.”
It’s unclear how, if at all, similar calls will be made in Canada. What is clear, from my conversations with in-house counsel at large institutions, is that they are dissatisfied (frankly, fed up) with the astronomical legal fees they are being charged by outside counsel – due to the billable hour. This is an unsustainable model – as I previously discussed in a blog – and I have no doubt in my mind that some new and innovative billing systems will ultimately take shape during this transitory phase. It’s already started to happen – just take a look at our new report on legal fees in Toronto!