Focus on “shadow hours” misses the point of AFAs

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Aric Press of American Lawyer penned a terrific article, What the Rise of Pricing Officers Says About Big Law’s Future. The article, reflecting the results of a recent survey, offers some great insights into the move to non-hourly billing at the largest law firms. One result was disappointing, though not surprising:

Value is harder. We don’t have a definition. We barely have a concept. And we surely don’t have the essential building block: trust. As part of the survey, we asked pricing officers whether clients insisted on “tracking shadow hours” performed by firms so they could be certain they weren’t getting the short end of the deal. Only 13 percent responded, “Not usually.” And none answered, “Never.”

The problem with shadow hours is that they are used to judge “value” by comparison to what the client would have paid if billing had been based on an hourly basis. One of the primary purposes of alternative fees, however, is to eliminate time as a measure of value provided. If clients insist on continuing this measure, they will miss the true value of alternative fees provide.

Topics:  Billing, Corporate Counsel, Law Practice Management, Young Lawyers

Published In: Professional Practice Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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