Winning Alternatives to the Billable Hour: Strategies That Work [Paperback]

James A. Calloway (Editor), Mark A. Robertson (Editor)

Book Description

Publication Date: October 25, 2002

This practical book details the economic and client service advantages of alternative law firm billing methods, the various billing methods currently available and how to select and implement the right alernative billing method for law firms of all sizes.

Editorial Reviews

From the Inside Flap

Review/Endorsement by David H. Sump in The Newsletter of The Virginia Bar Association on June, 2005:

"Many of you, like me, practice in firms that operate predominantly on the billable hour system. We feel like hamsters on a hamster wheel, running feverishly to bill sufficient hours to pay the rent every month. We dream of a future when our young associates will work in a system where legal services are compensated on value delivered to the client rather than time spent to achieve the result.

But the billable hour dies hard, like a cockroach that refuses to check into its own special motel or a rodent that scoffs at the spring-loaded cheese morsel. The billable hour is an institution that resists the revolution to alternative billing systems. I must confess that as much as I detest the billable hour, I know that if we bill enough of them each month, there will be money left over at the end of the month to pay my partners.

It is in the face of this reality that the ABA publishes yet another work aimed at helping the legal profession to kick the hourly billing habit. In Winning Alternatives to the Billable Hour - Strategies That Work (ABA Press, 2nd Ed. 2002), editors James A. Calloway and Mark A. Robertson collect a very persuasive assortment of case valuation and billing systems that ignore the billable hour. This book is especially helpful because it addresses the needs and concerns of all attorneys, from solo to large firm practitioner.

Winning Strategies supersedes its predecessors by addressing the previous concerns expressed challenging the use of alternative billing systems and providing good, solid solutions. The book not only forces us to re-evaluate how we value cases, (or more importantly how our clients value our services), but also how we can use these valuation techniques to establish a billing system that reduces risk for both the firm and the client.

I highly recommend this book as the best in the ABA series of publications offering alternatives to the billable hour. You will find especially helpful the many exhibits providing sample engagement letters and fee agreements for several of the alternatives found in the text. A hand floppy disk containing these exhibits is also provided with the book. At the VBA Law Practice Management Division price of $119.95, this book is worth the investment!

David H. Sump is the Managing Partner for the firm of Crenshaw, Ware & Martin, PLC, in Norfolk. He practices in the area of maritime litigation and contract litigation.

Product Details

• Paperback: 320 pages
• Publisher: American Bar Association; 2nd edition (October 25, 2002)
• Language: English
• ISBN-10: 1590311175
• ISBN-13: 978-1590311172
• Product Dimensions: 10 x 6.8 x 0.7 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #1,909,845 in Books (See Top 100 in Books)

More About the Author

Mark A. Robertson is a partner the law firm of Robertson & Williams in Oklahoma City where he represents businesses and the families that own them. His practice is concentrated in corporate, securities, estate and asset planning and mergers and acquisitions. He received a Bachelor of Arts degree with honors from DePauw University and a Juris Doctor from the University of Oklahoma College of Law. He also attended the University of Edinburgh where he studied international law but majored in Scottish hospitality and culture.

Mr. Robertson is a member of the Oklahoma and American Bar Associations. He has been on the Editorial Board, the Articles Editor and the Columns Editor for the Law Practice Management Magazine of the American Bar Association Law Practice Management Section, has served on the Publishing Board for the Law Practice Management Section and is a Past Chairman of that Section. Mr. Robertson currently represents the Section in the House of Delegates of the American Bar Association. Mr. Robertson is a Fellow of and on the Board of Trustees of the College of Law Practice Management.

Mr. Robertson is the co-author with James A. Calloway of the book Winning Alternatives to the Billable Hour: Strategies that Work, both the 2nd and 3rd Editions, publications of the American Bar Association Law Practice Management Section and the fourth and fifth books in the best selling series on alternative billing.

Mr. Robertson is a frequent lecturer on law practice management issues, family business transition, estate planning and capital formation issues and is a contributing author on a variety of topics to various national, state and local bar association and business publications.

Customer Reviews

Most Helpful Customer Reviews

3 of 3 people found the following review helpful:

4.0 out of 5 stars Why should billing by the hour be "the rule"?, September 4, 2006

By 

Janet H. Moore "Global Rainmaking Strategist" (GlobalRainmaking.com) - See all my reviews
(REAL NAME)   

This review is from: Winning Alternatives to the Billable Hour: Strategies That Work (Paperback)

Why do so many lawyers simply bill by the hour?

In the increasingly competitive legal market, lawyers are searching for ways to bring their clients more value. This book encourages lawyers to break out of the hourly billing rut and try a variety of value-based billing strategies.

The book discusses how clients perceive the "value" of legal services. It also suggests how lawyers can assess such value--and bill accordingly. The book sets forth fifteen alternate billing structures and, most important, highlights the pros and cons of each.

As a coach and consultant to lawyers, I particularly liked the chapter on client communication through billing. This is critical: every client communication (including a legal bill) should be treated as a rainmaking tool. Legal bills need to describe the services rendered in a way that lets the client understand and appreciate the full value received.

Lawyers will enjoy the detailed appendix and attached CD full of sample fee agreements and other client correspondence.

3.0 out of 5 stars Thinking about alternative billing? Read this book for some good ideas, April 13, 2011

By 

A. Nye "Al Nye The Lawyer Guy" (Portland, Maine USA) - See all my reviews
(REAL NAME)   

This review is from: Winning Alternatives to the Billable Hour: Strategies That Work (Paperback)

The laudable purpose of this book is to encourage lawyers to change from hourly based billing to an alternative billing system that is beneficial both to the lawyer and the client. The book explains how to implement different billing methods and argues that lawyers can gain a strategic advantage over others by using a more flexible approach to billing.

The authors do an excellent job of presenting and explaining the pros and cons of various billing alternatives, including:

Fixed or flat fees;
Contingent fee;
Hourly fee;
Blended Hourly Rate;
Fixed or Flat Fee Plus Hourly Rate;
Hourly Rate Plus A Contingency;
Percentage Fee;
Task-Based Fee;
Retrospective Fee Based Upon Value;
Unit Fee;
Relative-Value Method;
Lodestar Method;
Statutory or Other Scheduled Fee System;
Availability-Only Retainer; and
Retainer as a Deposit Against Future Services.

The book is written for lawyers in all firm sizes. I'm pleased that solos and small-firm lawyers are given special treatment with a chapter written specifically for them and a highlight in the Introduction suggesting which chapters would be most beneficial to this group of lawyers. I am also pleasantly surprised by how many alternative-billing practices I've used over the years.

The book explains that for billing on anything other than an hourly basis, the first thing that must be done is to know the cost of producing legal services. Cost is only one factor. The authors suggest that price is also defined "as the amount of money that a well-informed client (the purchaser) is willing to pay for the value of the services of the lawyer (the seller)."

In order to better determine price, a "value curve" is examined which depicts clients' views of the value of various legal services. The "value curve" is divided into four segments:

Unique: Work that is absolutely critical to the client. This work represents less than 4% of the available legal market.

Experimental: These are high-impact or high-risk matters for the client. For this work, the client must have personal confidence in the lawyer. Approximately 16% of the work in a given market is experimental.

Brand Name: This is routine but important work for a client. This work will go to lawyers who have established a brand name and reputation for handling these types of cases. This makes up around 20% of the work available.

Commodity: This is work that clients believe any reasonably competent attorney can handle. This is the routine stuff and makes up about 60% of the market. This work tends to be quite price-sensitive.

The authors believe that in order for alternative billing to be successful, lawyers must understand the "value curve", review each potential case to determine where it falls on the value curve, analyze their practice and decide which areas where innovative billing might be appropriate, determine which clients might be receptive to alternative billing methods, examine closed files to come up with what fee might be appropriate from a cost accounting perspective and effectively communicate the billing process to the client by emphasizing that the client is a lawyer's most precious resource.

If all this sounds like a lot of work just to charge clients something other than the typical hourly rate or contingency fee - that's because it is. Unfortunately, that is also why the hourly rate is the norm - doing anything else requires a close analysis of your legal practice and a great deal of thought about fees in each and every case.

In essence, the authors argue that in order to seriously implement innovative billing, a lawyer or law firm must perform a detailed self-assessment, must look closely at objectives and goals, should examine present and future market trends, review present billing methods and have a willingness to try innovative billing. For many lawyers, the effort required for this appears overwhelming. It is much simpler to just quote an hourly rate and move on to the next issue.

Until clients demand a change in the way that lawyers bill for services, the hourly rate will reign king for a very long time.

5.0 out of 5 stars How to do away with the billable hour, November 18, 2008

By 

Andrew Z. Adkins III (Gainesville, FL USA) - See all my reviews
(REAL NAME)   

This review is from: Winning Alternatives to the Billable Hour: Strategies That Work (Paperback)

Winning Alternatives to the Billable Hour: Strategies that Work (3rd Edition), by Mark Robertson and James Calloway, is one of those books that delivers above and beyond the call of duty. This is the third edition to an already great book. Mark Robertson is a practicing lawyer in Oklahoma City and former chair of the ABA's Law Practice Management Section. Jim Calloway is an attorney who is the director of the Oklahoma Bar Association Management Assistance Program. Both combined their unique backgrounds and talents to write an outstanding book packed full of information about why the billable hour is not necessarily the best billable method.

In these days of economic madness, lawyers are finding that while their time is valuable, it's their knowledge that is more valuable and clients need to know that they are getting the best bang for the buck. Not all clients like to be billed by the hour, especially when they can find other lawyers who can do the same work but at a more reasonable rate.

Mark and Jim combined their years of knowledge to produce a book that gives the reader an understanding of the various billing methods and how to adapt different methods for different types of cases. They provide a roadmap for how to transition away from the billable hour. Technology has changed so many things for all of us, but to the lawyer that continues to bill by the hour, technology has become a double-edged sword.

I highly recommend this book to anyone and everyone that bills for their services, not just attorneys. It will help light the way to not only better billing practices, but also help to build better relationships with your clients.