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Is The Billable Hour Killing The Traditional Law Firm?

We at LawFuel have written frequently about new law models, how technology is changing the way the law is delivered and of course the “curse” of the billable hour.

The billing practices of law firms have done several things in recent years – for one, it has developed or enhanced an out-moded billing system that has enriched many lawyers in white shoe law firms, but it has also created major opportunities for legal entrepreneurs to encroach on their territory with new legal models.

The issue has been well portrayed in an article in The Atlantic from former lawyer Leigh McMullan Abramson, who quotes former Orrick chairman Ralph Baxter who says the “billable hour is the culprit of everything.”

Implementing innovations that render billable hours obsolete can be like tugging on a thread that threatens to unravel the basic concept of a law firm. For example, the start-up Lex Machina can speedily mine and analyze litigation data that would take an army of associates months to go through. Suddenly, several associates aren’t billing. And if they aren’t billing, the firm could do without them. And if they could do without those associates, then they could do without the office space they occupy. There goes the business model.

Ms Abramson points to models of law practice such as Smithline PC (a subscription model),  Ironclad (a legal software company), Curo Legal (consulting and legal staffing firm), Pangea 3 (legal outsourcing).pangea3The different law delivery models keep happening.

Using new technologies to create a more efficient legal system “should (and does) make innovative lawyers very rich,” says Joe Borstein, who left Big Law to become the global director of the legal-outsourcing firm Pangea 3. But there are non-monetary benefits, too.

“These attorneys improve access to rights and justice for millions of people,” says Borstein. And the chance to improve the lives of unhappy attorneys has been incentive enough. “Changing this profession for lawyers who are categorically miserable is my calling,” says Christopher Marston, the founder of the law and financial-services firm Exemplar.

None of this development is going to make lawyers redundant – but technology will be playing a far more significant role in a way that makes the “stuck in the ’90s” situation that Leigh Abramson writes about so pertinent.

 

leighLeigh McMullan Abramson is a lawyer and writer. Her work has been published The 3 Week Diet
in The New York TimesTablet Magazine, and Town & Country.

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