Billable Hours

Killing the Billable Hour: One Op-Ed At A Time

Evan Chesler Cravath.jpgEvan Chesler, presiding partner at Cravath, is the latest to raise his voice against the billable hour. In an op-ed piece he penned for Forbes magazine, Chesler says:

I’m a trial lawyer. I bill by the hour. So do the associates who work for me. I have lots of clients, so I can pretty much work, and bill, as much as I want. This needs to be fixed. Yes, you read that correctly.

Of course, partners and clients and even journalists have been calling for or predicting the death of the billable hour for years. As Chesler himself contends in his piece, nobody really likes the billable hour:

The billable hour makes no sense, not even for lawyers. If you are successful and win a case early on, you put yourself out of work. If you get bogged down in a land war in Asia, you make more money. That is frankly nuts.

Of course, there is a reason that the billable hour won’t die. More on that after the jump.

Chesler indirectly makes the point for the billable hour, though he almost certainly doesn’t intend to:

How much do I bill per hour? We don’t make numbers public at Cravath, but you can assume I’m not cheap.

He then goes into an elaborate analogy about expensive contractors, expensive kitchens, and other expenses that I cannot afford.

But the fundamental beauty of the billable hour isn’t really addressed.

“I’m not cheap.” The billable hour still provides an excellent way for lawyer A to whip it out over lawyer B. “My firm is not cheap,” or “the negotiated price point for high end litigation services accurately reflects my added intellectual value, and it’s not cheap” doesn’t have quite the right ring to it does it?

The legal profession is an adversarial system … and — to quote Herm Edwards — “you play, to win, the game!” The billable hour is an easy “mini-game” to calculate.

Regardless of the efficacy of Chesler’s article, it’s still pretty interesting that he made the argument in the first place. AmLaw Daily offers this interesting information:

Client fees have been an issue for Cravath recently. In December, when the firm announced it was cutting its associate bonuses to roughly half of the 2007 payments, Cravath made a point of announcing that its fees would be frozen in 2009. This was not completely helpful to corporate customers as the firm refused to publish its fee schedule. The only publicly available fee information from the firm was filed in mid-2008 as part of a long-running employment discrimination case. In that matter, a mid-career litigation partner posted his billable rate at $875 an hour, a $205 an hour increase since 2004.

The billable hour probably isn’t going anywhere anytime soon. But it is nice to dream.

Kill the Billable Hour [Forbes]

Cravath’s Chesler: Time to Kill the Billable Hour [AmLaw Daily]

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