The AmLaw Daily’s Welcome to the Future column, It’s all about Quality (September 29, 2009), explains why the billable hour may be doomed. Paul Lippe, founder and CEO of the Legal OnRamp, argues that large law firms must abandon the billable hour because what clients really buy is quality. He notes that, “while it is easy to measure inputs (hence the attraction of the billable hour), and harder to measure outcomes, still only outcomes are quality, only outcomes create value.”
Achieving good outcomes increasingly depends on technology and process, which means adopting new and innovative ways of serving clients. Lippe cites three examples of recent innovative approaches that can produce quality outcomes independent of hours billed:
- Alex Hamilton, a Latham & Watkins partner, automated creating complex outsourcing agreements, which enables Latham to deliver lower and more predictable costs.
- Kingsley Martin at KIIAC develped a document analysis tool that evaluates EDGAR or other document repositories to answer key substantive questions (”has Skadden ever agreed to this indemnity clause when they represented the Acquirer?”) and so begins to “open source” legal know-how. This streamlines drafting.
- Lippe’s third example is Integreon: ”US-based outsourcers like Integreon can deliver predictable quality at lower cost by intensively managing the highly repetitive portion of large projects and incorporating offshore lawyers.”