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In-House Counsel

Survey Confirms It: GCs Dislike Billable Hours System

Posted Apr 28, 2009 11:18 AM CDT
By Debra Cassens Weiss

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A survey of general counsel and chief legal counsel confirms dissatisfaction with billable-hour billing used most often by large law firms.

The survey by the Association of Corporate Counsel found that 77 percent of respondents would like to increase the percentage of work handled by outside counsel using alternative fees, according to an executive summary. Currently, only 22 percent of respondents reported that alternative-fee arrangements make up more than 10 percent of outside counsel spending.

“I'd like outside counsel in big litigation matters to get some skin in the game so as not to have reason to just rack up billable hours,” one respondent wrote. Said another, “I hate the billable hour.”

Asked how outside counsel could improve their relationships with in-house lawyers, 60 percent said they could offer alternative billing, 57 percent said they could focus on budget management, and 49 percent said they could improve communication. Choices that got the least backing were on-site visits, cited by 7 percent of the respondents, and better knowledge management, cited by 5 percent.

The Am Law Daily summarizes the results this way: “So: face-to-face contact ranks far below the almighty buck.”

The survey also found a decline in hiring by in-house departments. Only about one-quarter of respondents plan to hire lawyers or staff this year, down from 32 percent in the last survey.

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