Alternative Fees. Boutique Firms Relentlessly Focused On Client Service. I Rest My Case.

One of the blogs I read regularly is The Wired GC.  I just read this post in which the Wired One analyzes the results of American Lawyer’s recent mid-level associate survey in terms of what the results mean for client service.  One great observation:

Since midlevel associates are often regular service providers for many law firms, I do cringe when I think that those entries on the monthly invoice represent clock-fixated young lawyers who resent their firm’s partners. What do they think about the firm’s clients? Am I part of the problem?

The Wired One the analyzes what clients should do about this problem.  He says:

Well, you could choose firms based upon quality-of-life surveys. In reality, however, that’s not the way firms are selected–it is nice to see, but not a sufficient criterion.

The other thing a GC could do is migrate work appropriately to good firms that have lower billable hours targets. Would these firms have associates with better attitudes? Maybe. Would the firm charge less per hour? Probably.

But his conclusion is killer:

Most clients of major law firms have probably restructured operations and staffing in the last 10 years to reduce costs, increase quality, and meet competitive challenges.

How long can law firms continue to meet their challenges by raising rates and hourly targets?

The survey says: perhaps not much longer.

Let me add a couple of suggestions for clients to consider.  The real solution is abandoning hourly rates.  But I realize most clients won’t just jump wholesale to this model.  So my advice?Experiment.  Send some of your work to firms that will do it on a modified fixed fee arrangement. (I say modified because I am a big believer in law firms having “skin in the game” so that the incentive to get the best result is palpable.)  Not worrying about hours or hourly rates is liberating.  Try it.  Also, try a firm who doesn’t have a list of blue chip clients a mile long.  See what it means to be a prized client.  And find a firm whose commitment to client service is demonstrated.  Find out what it means to be treated by a law firm the way you are when you check in at the Ritz or the Four Seasons.  You can get much more for your legal dollar than you do.  You just have to demand more.

Comments

[Betsy Markum]

I can't believe it, my co-worker just bought a car for $18265. Isn't that crazy!

[Joel S.]

A couple of thoughts:

1. I think your suggestion about switching firms makes more sense for smaller businesses than for large ones. It seems to me that big business bureaucracy and egos stand in the way of leaving a big name firm in favor of a very good but lesser known firm.

2. I've been hearing about the death of the billable hour for quite some time. I understand the sentiment, but it doesn't seem like there's much critical thinking about the downsides of the alternatives. Law firms are NOT, as a whole, going to take a pay cut. As a result, they are going to set a fixed fee that equates with what their hourly fee would be, and they are going to charge extra (on an hourly basis) for any unexpected matters that arise. The incentive also switches from working as many hours as possible on a client matter to working as few hours as possible -- is that really any better for the client?