My kids are now old enough to ask questions to which I have no answers-Which came first, the chicken or the egg-type questions. (At least we’ve moved on from why did the chicken cross the road types!)  But McGuire Woods’ shocking discovery that client service is a good thing and newfound commitment to alternative fees begs a similar question:  Do we not have greater movement away from the billable hour because clients don’t want alternatives or because law firms won’t offer them?  A vote please.

As I have mentioned before, I have the opportunity to host a series of roundtables of inside lawyers in a couple of weeks, and I am really looking forward to hearing the perspective of inside counsel.  But as I have prepared for these roundtables, my own thinking has evolved further.  I have to confess that I used to fall into the category that feels that inside counsel must demand the change and vote with their feet.  I still believe that to a degree, but I am starting to understand there is more there than I had allowed for.  If alternative fees simply become a surrogate for billable hours, the only real advantage is certainty, assuming the alternative used creates that element.

Perhaps the answer is that more must be offered for inside lawyers to feel use of alternatives on a widespread basis is something other than a play for enhanced profits per partner, a statistic that regrettably has become an industry driver.  But I found one piece of insight that I think might reflect the real situation:

“The most important and effective method for converting existing clients to a value system is to offer new value. There is no reason in the world for a client to move from the hourly or daily rate to a fixed fee for the exact same value the buyer is now receiving. Think about it: If people change only in accordance with their own self-interests, then “What’s in it for them?” Why abandon a clear, reasonable and long-standing billing arrangement?
Well, you abandon it if a new system provides more value and better appeals to your self-interest.”

Alan Weiss

Value Based Fees, 2002
(part of The Ultimate Consultant Series)
Perhaps the question we should be focusing on is what added value we can provide.
 
One thing seems clear-change is coming.  As General Eric Shinseki, former Chief of Staff of the U.S. Army, recently said, “if you don’t like change, you’re going to like irrelevance even less.”