Does billing by the hour reward inefficiency? Some condemn hourly billing as a system that creates an incentive to perform unnecessary tasks that needlessly prolong litigation. Flat fee billing has been touted as an alternative that creates better value for the client by eliminating the incentive to bill unnecessary hours.
Although savvy counsel interested in good client relations will be receptive to billing alternatives, a strong defense can be made that billing by the hour is the best option for a fair and reasonable way to compensate counsel for efficient and effective litigation services.
The conventional assault on hourly billing often begins with an anecdote by an attorney regarding billing by the hour along the lines of “He’d be crazy to seek an early dismissal; that would put him out of business.” Yet this is precisely what a competent attorney does all the time. Although this results in fewer billable hours on a specific file, it also results in a satisfied client likely to give more business to the lawyer. This is how good attorney-client relationships are created and sustained.
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