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Summary: The law firm of Jackson Lewis said recently that it will do away with billable hours for its associates as of January 1, 2015.
Jackson Lewis recently said that it wants to move in a new direction, which is towards alternative fee arrangements, according to The Am Law Daily.
The firm wants to eliminate the billable hour for its 293 associates and will do so by January 1. Beginning with that day, associates will be assessed based on client service, efficiency, responsiveness, pro-bono commitment and team orientation.
Firm chair Vincent Cino said, “The billable hour is directly opposed to the best interest of the client and to the provider of service because by its very nature it adds an artificial barrier to the accomplishment of the only real objective, which is a quality legal product for a set and expected price.”
The firm has used a flat fee arrangement with one of its largest clients, Pfizer, since 2008. This fee means the client is not charged billable hours or flat per-matter fees.
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To read more about Jackson Lewis, click here.
“We encourage them as a firm to be as efficient as possible. How they choose to do that is the firm’s decision,” says Margaret Madden, vice president and assistant general counsel of Pfizer.
Big law firms have been fighting to get rid of the billable hour for quite some time now. Back in 2009, Evan Chesler, the chair of Cravath, Swaine & Moore, wrote an op-ed for Forbes that discussed dumping the billable hour.
“The billable hour makes no sense, not even for lawyers,” he wrote. “If you are successful and win a case early on, you put yourself out of work. If you get bogged down in a land war in Asia, you make more money. That is frankly nuts.”
Not long ago, Jackson Lewis based its associate productivity bonuses on number of hours worked. Associates who failed to reach the 1,900 required billable hours each year were not eligible.
To read more stories about billable hours, click here.
A consultant from Altman Weil, Thomas Clay, said, “When they look at productivity, do they look at hours? Yes. But if you can’t get the fee receipts in the door, do you get less credit for your hours? Yes. In the end, you can’t spend hours at the acme—you can only spend cash.”
Will the new system at Jackson Lewis be successful? Share your thoughts using our poll.
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