A Narrowminded Decision by the Supreme Court
Compensation based on results aligns the interests of the lawyer with those of the client.
We’ve been living in the 21st century for nearly eleven years. When will the Supreme Court get here?
In a decision right out of the Gladstone era, the Supreme Court refused to even consider alternatives to the status quo, hourly (“lodestar”) billing method used by attorneys. Why not, particularly when even the most white shoe of law firms (charging by the ever-growing billable hour) are laying off associates and dumping partners left and right. Change should be considered from anybody’s perspective. But I suppose the decision is not altogether surprising for a group of nine who have limited experience in the “real” legal world. Sure, the Chief Justice had a stint as an $895/hour at Covington & Burling in Washington, DC. But most of the Court’s experience was decades ago.
The simple fact is billing flexibility benefits the clients and attorneys. Lawyers should be paid for the value they provide their clients; clients should only have to pay for the value they receive from their lawyers. And sometimes that demands an adaptation of the hourly billing method.
Most importantly:
Compensation based on results aligns the interests of the lawyer with those of the client.
Traditionally hourly rates don’t do so. In fact, hourly billing does precisely the opposite — it creates an incentive for lawyers to overbill and for clients to minimize billing to save money. That friction serves nobody’s purpose and creates an obvious impairment to a lawyer’s independence and objectivity.
I don’t mean to suggest that there is no place for the billable hour. Courts can and should continue to look to hourly billing as a starting point to determining appropriate fees. But lawyers and clients should have some flexibility to tailor the compensation structure. The Supreme Court did us all a disservice with this narrow-minded ruling.
Assisted by David Martin
Steven N. Berk has over twenty years of litigation experience spanning both the private and public sectors. His practice ranges from representing Fortune 500 Companies, to consumers. Steven is based in Washington, D.C. and founded Berk Law in May 2009....
