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Frequent obstacle to alternative fees? Software and management can’t handle it?

This speculation comes from the Met. Corp. Counsel, Vol. 18, Jan. 2010 at 18. “Often legal departments remain with the billable hour because their billing systems and supervisory arrangements are not positioned to deal with the perceived complexities of alternative fee arrangements.”

I don’t buy that. A matter management system or an electronic invoice system (e-billing) ought to serve the department, not block its progress. Any fee arrangement results in a bill, somewhere and in some detail, so the department can track the information in its extant system. I am simplifying, to be sure, but let’s not have the software tail wag the cost-saving dog.

If “supervisory arrangements” is code for “we can’t figure them out and if we can we can’t oversee the bills that result,” then shame on lazy legal department managers! If it means that internal disagreement about means and ends (do alternative fees work), then the general counsel needs to set the march and get on with it.

If hourly billing clings to legal departments, it ought not to be because of either software’s inability to handle the billing information or managers’ unwillingness to accommodate an improved basis for billing.

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3 responses to “Frequent obstacle to alternative fees? Software and management can’t handle it?”

  1. Steven Levy says:

    I don’t buy this either. Great points, Rees. Any current e-billing solution can do this. So can any accounting package. Worst case, there’s always a workaround.
    Claiming you’re at the mercy of your tools is a way to fast-fail in the business world. Fix it, replace it, work around it, but do the right thing for your business, not your IT systems.

  2. Robert Swayze says:

    It’s clear that e-billing is a major detriment to partnering with alternative arrangements. E-Billing was never designed to expedite informaton sharing and nurture innovation. Both parties have their hands tied by e-billing. Eliminate the middle man and his restrictive, out dated software and you will see progress.

  3. We solve this problem by integrating simplified billing onto our alternative fee arrangements–viz., in exchange for the alternative structure, our invoices do NOT include detailed time entries. If a client wants those entries then we charge for the time it takes to compile them.
    One other important point, highlighted in Candlewood’s response to the Debevoise & Plimpton claim for legal fees, is to make certain that time-billers are precise and clear in their entries. So, for example, we do not accept a time-slip that says “Review file” without identification of the file and why it is being reviewed.