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November 13, 2008

Comments

Allison Shields

Liz:

I agree that one of the stumbling blocks in implementing value pricing or alternative billing not based on hours is the courts. Part of the problem is that courts are slow to change, and many of them have been basing reasonableness of fees on hours multiplied by rate for a very long time. But inherent in that discussion is whether the hourly rate is reasonable and whether the time expended was reasonable under the circumstances, and some of the same issues of value arise there.

Another part of the problem may be that when lawyers are submitting their fees for review, they are only submitting hours and rates, and are not submitting documentation regarding value (and specifically value discussions with the client as evidenced by the retainer agreement).

There's no question that the profession has a long way to go. But given the current economic climate and the changes in the marketplace, lawyers will have to show why their services are not mere commodities and demonstrate their value. Why not tie fees to that value, rather than time?

Liz Harris


We have had very similar provisions in place in most Australian states for a number of years. The problem comes when there is a legal dispute and costs are arbitrated (or here, assessed by a court or court appointed assessor). In the assessment, costs which are "fair and reasonable" are allowed and there is still the view that "fair and reasonable" is measured by looking at the time spent and multiplying by a market hourly rate. Value does not come into it. Certainly "downunder" there is a way to go before lawyers embrace value billing.

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