Attorney Fees

WilmerHale Leader Is the Latest Fixed-Fees Convert

Law firms shouldn’t have to be dragged kicking and screaming into the world of fixed-fee billing.

Firm leaders would do well to embrace the economic benefits of fixed fees, according to William Lee, the co-managing partner of Wilmer Cutler Pickering Hale and Dorr. The alternative billing arrangement “is an idea whose time has come,” Lee says in a National Law Journal article he co-wrote with former General Electric general counsel Ben Heineman.

Lee isn’t the first leader of a large law firm to come out publicly in favor of alternative billing. Cravath Swaine & Moore presiding partner Evan Chesler wrote a Forbes article in January arguing that the billable hour should be killed.

Lee and Heineman see benefits for both law firms and clients. “For law firms facing reduced demand and cash flow problems (if not crises), the fixed fee addresses the issues of increasing overhead devoted to the billing process, clients flyspecking bills and demanding after-the-fact discounts, and delays in payments and falling realization rates,” they write.

Clients, on the other hand, will benefit because their legal costs will become more predictable and will no longer be divorced from value, according to the story. The change will also foster better relationships—and fewer conflicts over money—between in-house counsel and the outside lawyers.

How will law firms be able to do more with less? The article suggests a couple ways: better use of technology and “selective outsourcing.”

Legal novelist Scott Turow has offered a blunter assessment of the economic incentive for flat-fee billing. He says lawyers have reached the point where they can’t bill additional hours in a year, and flat fees could help continue the income escalation.

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