The Editor ‘n Chef of Blawg Review has come out with a double-barreled, two-fer blawg carnival this week. The double-shot features both Blawg Review #29 and Carnival of the Capitalists #107.
Besides the expected machinations on the Harriet Miers nomination, we enjoyed Bruce MacEwen’s inquiry into the economics of law firms at Adam Smith, Esq. This week, Mr. Smith polls his audience on Yea or Nay on the Billable Hour – Will the billable hour ever lose its dominance?
Quoting Jim Taronji, an antitrust partner at Howrey, he writes:
“Eventually, the “billable hour” will go the way of the Model T (just a curious novelty from the past). Why? Because that’s what corporate clients really want. They want certainty in billing because that’s what they need for internal budgeting purposes.
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The smart law firms will get ahead of their clients and accept (dare I say, “offer”) flat fees for each project, with a “change option” for unplanned situations.
Professional service providers do this now with a detailed “Statement of Work” that is created by the service provider and the client. It lays out what will be done and when, the number and level of human resources devoted to the project (times the number of hours each person will devote to completing the project, times their hourly rates), and additional costs (travel, copying, etc.). The end result is a budget that is agreed on by both sides. Any changes to the “assumptions” will result in a change in the final cost of the project.
While I don’t see billable hours going the way of the Dodo, for some types of projects, this may be the wave of the future. It takes careful planning and a knowledgeable client to make this work, though. Otherwise you have clients falling into a “penny-wise and pound-foolish” trap.
Also this week, there’s also a great round-up of quotes in “Mixed Messages on Sexual Harassment — and a Movie Too” over at George’s Employment Blawg.
