Issue: ACC Value Challenge
Significance: In-house lawyers can use management techniques to lower costs, increase predictability and obtain better outcomes.
Description: The “ACC Value Challenge” presses law departments within companies and the outside counsel they retain to adopt common-sense business principles, such as project and process management or value-based fee arrangements. In particular, the in-house bar has increasingly moved away from hourly-based fee agreements to various versions of fixed fee agreements (e.g., incorporating success fees and holdbacks). By introducing these and other efficiencies into legal practice, law firms can reduce their costs to corporate clients and still maintain strong profitability, and also more closely align their practice with the client’s real-world objectives. Because courts and regulators often do not realize that the landscape for legal management and billing has shifted dramatically in recent years, ACC finds opportunities to inform them of current practices in the profession.
Frequently Asked Questions
Q: What is wrong with billable hours?
A: Billable hours favor law firms’ needs over clients’ needs. They encourage law firms to spend unnecessary time, effort and money to look under every stone, when what clients really need are common-sense approaches to solving legal problems.
Q: How does this come up in the context of advocacy?
A: Over the last several decades, many governments have taken the idea of billable hours and written them into law. For instance, plaintiffs’ lawyers recover fees from courts based on the number of hours they work. But internally, companies are moving away from billable hours. The law has not yet caught up with that reality, and ACC tries to highlight the changes to courts and other regulators.