Award Winning Law Firm Eliminating the Billable Hour in 2015

Posted on March 4th, 2015 by Legal Fee Advisors

Prestigious law firm, Jackson Lewis, announced it is eliminating the billable hour for its associates on January 1, 2015, focusing its concentration on alternative fee arrangements instead.[2]

It appears that Jackson Lewis (“the firm”) believes eliminating billable hour requirements throughout its nationwide offices will shift its associates’ focus to more efficient practices to achieve the goals of the client. According to firm chair, Vincent Cino, “the billable hour is directly opposed to the best interest of the client….”[3] The firm believes that flat fee arrangements, for example, change an attorney’s emphasis on achieving the result(s) the client desires at the least costly price. In fact, the firm has used such an arrangement with Pfizer since 2008.[4]This will obviously also have an impact on the firm’s bonus structure since it will no longer be based on an associate meeting a requisite annual number of billable hours, but the firm plainly believes this is a better use of its attorneys’ time. The firm is not the first to do this, but they are the most recent.[5]In 2012, Law firm Holland & Knight eliminated billable hours for fixed fee clients in its Public Policy & Regulation Group in order to most efficiently aide those clients in reaching “their advocacy goals.”[6]

It is obvious that this trend of firms (slowly) transitioning to AFAs and eliminating billable hours has been emerging for quite some time in order, arguably, to shift their focus to a more holistic representation of the clients’ interests.  It is well recognized that the billable hour, although clearly engrossed in legal history, has been under severe scrutiny for decades.  Abuses of revenue producing actions have often been revealed in both the public and private sectors by numerous entities such as the courts when reviewing fee applications, and independent fee examiners when hired in the private sector to reduce the legal spend of corporations. Will more and more firms follow suit? Only time will tell… However, in the interim, courts and fee experts will continue to scrutinize general billing practices for adherence to applicable custom legal and ethical practices.

Dawn E. Guglielmo, Esq.

Legal Fee Advisors © 2015

[1] Jackson Lewis was named the 2014 “Law Firm of the Year” in the Litigation=Labor and Employment category by U.S. News – Best Lawyers “Best Law Firms.”

[2] Jim Vassallo, Billable Hours to be a Thing of the Past at Jackson Lewis, JDJournal,
http://www.jdjournal.com/2014/11/18/jackson-lewis-doing-away-with-billable-hours/?hvid=1NjUZB (November 18, 2014).

[3] Id.

[4] Id.

[5] See Rebneely, Holland & Knight Nixes Billable Hours Tracking in Public Policy & Regulation Group, http://www.jdjournal.com/2011/12/15/holland-knight-nixes-billable-hours-tracking-in-public-policy-regulation-group/ (December 15, 2011).

[6] Id.

For more information on how Legal Fee Advisors can help your company reduce legal costs, please contact David Paige at dpaige@legalfeeadvisors.com