The internet has been abuzz with talk about the Shepherd Law Group and their decision to forego billing by the hour and move to a fixed fee model. More proof that real lawyers actually are moving away from the billable hour. Part of the reason for all of the discussion was the Boston Globe Article entitled Beat the Clock, published earlier this week. The article talks about Shepherd's switch to billing clients a flat fee either on an annual basis or a per-task basis.
Jay Shepherd, the firm's CEO, writes a great blog, Gruntled Employees, and he reports that his firm billed 0 hours in 2007, but more than doubled their revenue. (And if you read my post about time not being a law firm's measure of profitability, perhaps this will reinforce my point. Clearly, this firm knows it's being profitable - much more profitable then they were when billing hourly - and they don't need timesheets to tell them that). Take a look at his blog for both his story and his insights into the reasons to move away from hourly billing.
Among those talking about the article and the Shepherd Law Group are: Ron Baker of VeraSage Institute and Andrew Perlman of Legal Ethics Forum (whose post contains some interesting observations about some hourly billing practices). Carolyn Elefant posts her insights on Law.com's Legal Blog Watch and continues the conversation by asking why lawyers and not clients, are (and some argue that they must) be the ones leading the charge away from the billable hour. And my friend Susan Cartier Liebel of Build a Solo Practice, LLC is also writing about it. She says, "[the billable hour is] a profession-created cockroach and as such it can be exterminated, one lawyer, one law firm, one educated client at a time."
Are you thinking about moving away from the billable hour? Or do you think the billable hour is the best fee structure to use in a legal practice?
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