The Billable Hour Isn’t Going Anywhere
David Lat is the founding editor of Above the Law. He previously served as editor of Wonkette, the widely read politics blog, and he founded Underneath Their Robes, the judicial news and gossip website.
Prior to that, David worked as a federal prosecutor in Newark, New Jersey; a litigation associate at Wachtell, Lipton, Rosen & Katz, in New York; and a law clerk to Judge Diarmuid F. O’Scannlain, of the U.S. Court of Appeals for the Ninth Circuit.
David graduated from Harvard College, magna cum laude, and Yale Law School, where he served as book reviews editor of the Yale Law Journal.
Question: How will the legal profession change in the upcoming years?
David Lat: I think we are going to see a lot of changes to the legal profession over the next decade or so, especially in the world of large law firms. This is an area that I've also been covering in the freelance writing for publications as well. And law firms have to change; they have to adapt to new circumstances. And I think the recession and the economic pressures that the recession has placed on firms are forcing what would have been a natural process anyway of evolution to take place more quickly. I think that's generally a good thing. I think firms have to figure out how to provide legal services more efficiently because their clients are no longer rich and fat and happy and willing to pay a lot of money for services that they can get more cheaply through, say, outsourcing.
There are outfits in India or the Philippines or other developing countries where you can have documents scanned and uploaded and even reviewed and tagged for a fraction of the cost that it would cost in the United States. And I think that law firms are probably going to have to start figuring out how can we utilize these services as opposed to wall them off. So I think one change is law firms will have to become more efficient. The second is just globalization. They will have to – as I was saying –recognize how to use resources from abroad.
A third thing that I think is compensation may come down. I don't know if that is going to be a long-term thing or not. We've already seen law firms cutting salaries for associates and profits per partner are declining at large law firms as well. It remains to be seen whether that is going to be a long-term trend or not. But until the recent recession, profits and the salaries had reached records highs and I don't know if that's necessarily going to be the case for awhile. Essentially, it's a matter of supply and demand. And right now, with all the laid off lawyers, deferred lawyers, unemployed lawyers, you just have a huge glut of lawyer talent. And when you think of lawyer hours, that is essentially what you are selling your clients, billable hours. There is a huge surplus of potential billable hours in search of work. And until that imbalance in the market is corrected, things are going to be a little bit grim in the world of big law.
Question: Do you think we’ll see a disappearance of the billable hour?
David Lat: I think that the billable hour is being eroded, but I don't think it will completely disappear, at least not in a very long time. One thing that's interesting is it's sort of like the devil you know. So I've talked to law firm partners who often say, "We want to do alternative arrangements. We want to do a contingent fee arrangement, or we want to do a flat fee, but with a premium for success." But the clients are a little bit nervous about it because at least a billable hour gives them some kind of metric. So, for example, say a firm handles a $100 million case for a client – Company X suing Company Y. And say the firm wants to do it on a contingency, so if they win, they get 30 percent, or 30 million. Well, that might be fine because if they win, it's a great result. But the in-house lawyer might think well, if I have to present a $30 million legal bill, my CFO – my finance guy, the company – will say, "Well, that seems really high." Why don't I try to do a billable arrangement and get a discount because oftentimes the firms will give a discount off their rates? And so he can say, "Well, I got X-million dollars in billable time, but I got a discount off it, and therefore I saved us money."
So the other thing is, people still tend to think in billable hours. So even when law firms are coming up with pitches – say they've been asked to submit a proposal to a client for a particular engagement. They will still think in terms of how many hours or how many people at their different rates will this project take to complete. So part of it is trying to figure out what is the alternative to the billable hour. So I think that these arrangements are definitely increasing. There's certainly statistical data on that. I think that in the past year – I believe this was mentioned in the Wall Street Journal – something like a selection on in-house councils were asked about alternative fee arrangements said that they went from being something like five or ten percent of their arrangements to somewhere between 20 or maybe even 30 percent. Like, they're definitely increasing, but the billable hour is still accounting for the majority of the work.
Recorded on November 6, 2009
While the legal industry may be headed for grim days, the method of payment won’t disappear any time soon, says David Lat, founder of Above the Law.
Explore how alcohol affects your brain, from the first sip at the bar to life-long drinking habits.
- Alcohol is the world's most popular drug and has been a part of human culture for at least 9,000 years.
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If you want to know what makes a Canadian lynx a Canadian lynx a team of DNA sequencers has figured that out.
- A team at UMass Amherst recently sequenced the genome of the Canadian lynx.
- It's part of a project intending to sequence the genome of every vertebrate in the world.
- Conservationists interested in the Canadian lynx have a new tool to work with.
If you want to know what makes a Canadian lynx a Canadian lynx, I can now—as of this month—point you directly to the DNA of a Canadian lynx, and say, "That's what makes a lynx a lynx." The genome was sequenced by a team at UMass Amherst, and it's one of 15 animals whose genomes have been sequenced by the Vertebrate Genomes Project, whose stated goal is to sequence the genome of all 66,000 vertebrate species in the world.
Sequencing the genome of a particular species of an animal is important in terms of preserving genetic diversity. Future generations don't necessarily have to worry about our memory of the Canadian Lynx warping the way hearsay warped perception a long time ago.
Artwork: Guillaume le Clerc / Wikimedia Commons
13th-century fantastical depiction of an elephant.
It is easy to see how one can look at 66,000 genomic sequences stored away as being the analogous equivalent of the Svalbard Global Seed Vault. It is a potential tool for future conservationists.
But what are the practicalities of sequencing the genome of a lynx beyond engaging with broad bioethical questions? As the animal's habitat shrinks and Earth warms, the Canadian lynx is demonstrating less genetic diversity. Cross-breeding with bobcats in some portions of the lynx's habitat also represents a challenge to the lynx's genetic makeup. The two themselves are also linked: warming climates could drive Canadian lynxes to cross-breed with bobcats.
John Organ, chief of the U.S. Geological Survey's Cooperative Fish and Wildlife units, said to MassLive that the results of the sequencing "can help us look at land conservation strategies to help maintain lynx on the landscape."
What does DNA have to do with land conservation strategies? Consider the fact that the food found in a landscape, the toxins found in a landscape, or the exposure to drugs can have an impact on genetic activity. That potential change can be transmitted down the generative line. If you know exactly how a lynx's DNA is impacted by something, then the environment they occupy can be fine-tuned to meet the needs of the lynx and any other creature that happens to inhabit that particular portion of the earth.
Given that the Trump administration is considering withdrawing protection for the Canadian lynx, a move that caught scientists by surprise, it is worth having as much information on hand as possible for those who have an interest in preserving the health of this creature—all the way down to the building blocks of a lynx's life.
The exploding popularity of the keto diet puts a less used veggie into the spotlight.
- The cauliflower is a vegetable of choice if you're on the keto diet.
- The plant is low in carbs and can replace potatoes, rice and pasta.
- It can be eaten both raw and cooked for different benefits.
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