Lower hourly charges don't necessarily translate into a lower bill for clients
Ask a lawyer what her hourly rate is and she'll probably give a dollar figure. Ask a client about his lawyer's hourly rate, and one may get a scowl. In fact, if one asks a client to describe his biggest complaint about his lawyer, one shouldn't be surprised if he says it's that hourly rate that is presumptively too high.
The imminent demise of the billable hour has been confidently predicted for years, maybe now more than ever. And yet, like Rasputin, no matter whether one tries to stab it, shoot it or poison it, the billable hour somehow manages to survive. The hourly rate -- at least until it finally dies -- is one of the knottiest aspects of the relationship between lawyers and their clients. The hourly rate problem can become a trap.
First, though, a cautionary tale: In 2005, the directors of Hewlett-Packard Co. were concerned about confidential board information leaking like a sieve to the news media. HP's "solution" to the problem was to hire private investigators who set about using a number of questionable techniques to investigate certain board members, employees and even reporters. When the dust cleared, HP's chairman had resigned, lawyers and others were indicted, a number of the principals were hauled before a congressional committee, the U.S. Securities and Exchange Commission investigated and the company paid a $14.5 million fine.
The real scandal, however, is that the plan was hatched with lawyers in the room.
How much would it have been worth to HP for one of its lawyers to say, "Hey, before we do this, let's make sure these investigators proceed in a lawful manner, because if they won't (or can't), we probably shouldn't do it at all." Would that 30 seconds of advice have been worth it, even at $750 an hour? In retrospect, the lack of that advice ended up costing HP millions of dollars and even more in shattered lives, careers and public opprobrium. HP, no doubt, would have paid dearly for the counsel it never got.
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Source: law.com
By: Press Millen
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