The Riseâand Potential Fallâof the Hourly Rate
By Ed Poll, Esq.
Principal, LawBiz® Management
Historically, until well into the post-World War II era, legal fees were based primarily on the nature of the service provided, the results achieved, and the amount at stake. Determining an appropriate fee for the work was a matter of professional judgment.
That changed in the mid 1960s when clients began demanding detailed billing statements and lawyers implemented timekeeping records as a management tool to seek greater efficiencies. As a result, today most lawyers are paid by the hourâalmost in the same way as an hourly laborer.
When lawyers are paid by the number of hours worked, though, self-interest can and often does affect their judgment about how much work to do for the client. Most lawyersâ billings are âfeaturesâ lists: This is what I did, this is the amount of time it took to do it, and this is what you owe me. That approach breeds dissatisfaction among clients because it doesnât address value and benefitsâthe worth to the client, as opposed to the cost of the service.