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Services rendered: How to fix the billable hour system

Law firms and corporate counsel should work together to fix the ?billable hour system rather than eliminate it, says Mike Trotter

28 May 2013

The billable hour has legions of critics and very few public supporters. Like the genie that won't go back in the bottle, it continues ?to play a dominant role in law firm economics and management.

Ironically, the system was forced upon law firms by their clients. Many firms resisted it but, in due course, embraced the billable hour with great enthusiasm ?and unswerving commitment.

During the last quarter of the 20th century, it became the standard basis ?for billing business clients for the ?services provided by law firms and ?greatly increased the profitability of ?major law firms.

Hourly billing is not the only source of greater profitability, however. Much-increased leverage has also been a big contributor and has played an important role in significantly increasing the cost ?of legal services.

But somehow, the billable hour system has become the most important management tool for law firms. So, rather than eliminate it, the t...

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