Now in Legal Rebels:
Posted Mar 29, 2013 04:25 pm CDT
Embarrassing emails that surfaced in a client’s fee dispute with DLA Piper illustrate the deeper problems wrought by the billable hour system, according to a former BigLaw partner.
One email, for example, noted that a DLA lawyer had “random people” doing research on a bankruptcy matter “in standard ‘churn that bill, baby!’ mode.” Another noted “we are already 200k over our estimate—that’s Team DLA Piper!” DLA has said the emails were an “inexcusable effort at humor, but in no way reflect actual excessive billing.”
Writing in the New York Times, former Kirkland & Ellis partner Steven Harper makes his case for change. Compensation based on billable hours, he said, pushes associates to work evenings and weekends. It encourages partners to keep client responsibilities for themselves. And it can result in errors caused by fatigue.
He notes that DLA has minimum expectations for billable hours, and associates working at the firm in 2011 billed an average of 1,831 hours. The system, he said, is not unusual.
“The billable-hour system is the way most lawyers in big firms charge clients, but it serves no one,” Harper writes. “Well, almost no one. It brings most equity partners in those firms great wealth. Law firm leaders call it a leveraged pyramid. Most associates call it a living hell.”
In Harper’s view, “There’s a way out of the mess. But it requires clients to press harder for alternative fee arrangements, courts to back away from policies that embed the billable hour, law firm leaders to stop rewarding excessive associate hours and senior partners to consider the deleterious consequences of their myopic focus on short-term profit-maximizing behavior.”
ABAJournal.com: “‘Churn that bill, baby!’ email surfaces in fee dispute with DLA Piper”
ABAJournal.com: “DLA Piper: ‘Churn that bill’ email was ‘inexcusable effort at humor’”