The Assault on the Billable Hour Continues

This recent article in the online edition of the Denver Post reports that though the billable hour remains the dominant compensation arrangement between corporations and outside law firms, as corporations slash their legal budgets, more law firms are offering or accepting various kinds of cost-saving fee arrangements - primarily fixed-fee or contingency fee arrangements.

In one interesting case, the Denver firm of Holme Roberts & Owen agreed to put 25 percent of its monthly charges into a bank account. Whether it eventually collects that money, or multiples of it, depends on the result in the case. According to managing partner Kenneth Lund, "it created an incentive for us to get a great result. It also created the opportunity for our client that if we were less than successful, they would get our services for substantially less."

Another Denver firm, Bartlit Beck Herman Palenchar and Scott, a nationally known litigation boutique, typically arranges for a flat monthly fee with incentives based on the outcome of the case. "We want to be paid for the value that we deliver," said partner Joseph Smith. "The hourly system breeds a certain indifference to the actual value delivered."