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Not Many Lawyers are 'Very Satisfied' with Alternative Fees: Survey

By Andrew Lu | Last updated on

Surprise, surprise, lawyers are slow to embrace change as indicated in a "satisfaction survey" of attorney alternative fee arrangements.

More and more attorneys are turning to alternative fee arrangements, according to the survey of 194 large law firms and 141 law departments. However, only 26 percent of legal departments and 11 percent of law firms reported were "very satisfied" with the fee structures, reports the ABA Journal.

So are attorney alternative fee arrangements here to stay, or this just a bump in the road to the slow death of the billable hour?

For the past few decades, attorneys have charged their clients by the hour. The billable hour is oft-mocked and much maligned by both attorneys and their clients. With some attorneys charging over a thousand dollars an hour, it's not hard to understand why.

However, a successful alternative to the billable hour has never taken hold. Most recently, alternative fee arrangements like fixed fees, flat fees for discrete services, and success fees have all been tried. With these arrangements, the client usually knows upfront how much he or she will pay and there is no anxiety watching the lawyer's clock tick.

In addition, success fees and value billing have been particularly popular with clients as they only pay upon victory or when they receive some benefit. However, these fee arrangements may be unfair to lawyers who put in a lot of hours only to face an unsympathetic judge or jury.

To answer the question -- whether attorney alternative fee arrangements will eventually replace the billable hour? -- the answer is probably not.

While both the billable hour and alternative fee arrangements have critics, we'll likely continue seeing a mixture of the two fee arrangements. The billable hour does have it's place in difficult and uncertain cases. While attorney alternative fee arrangements may be appropriate for more straightforward cases and paperwork.

The unhappiness reported in the survey may just be the result of attorneys trying to figure out when to use alternative fee arrangements and when to use the billable hour.

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