Friday
Aug282009
Clients are saying “Billable hours don’t measure value”
Friday, August 28, 2009 at 9:45AM
Listen to this video by Amy Schulman, general counsel of Pfizer. She's talking about Pfizer pushing all of their outside law firms into fixed fee agreements and why this is valuable for BOTH Pfizer and the law firms themselves.
Below is Schulman's quote that encapsulates the entire billable hour debate in professional services firms.
"The way that a law firm works right now is that it's built on a pyramid. So that even if you assume that lawyers have their client's best interests at heart their entire economic model is predicated on numbers of billable hours billed. And so that doesn't teach or train or even necessarily reward the type of kind of solutions oriented, proactive thinking that is actually at the heart of what a corporation values and what I value. You're going to have to get used to making less money. But I can offer you rewards as a client that are non-economic but that will definitely add to value."
Within the legal community this is a raging debate and it has started to spill over into accounting firms, primarily through groups like the Verasage Institute. What is unique about this video is that it's one of the first times I have heard the debate articulated so succinctly from a client's perspective.
Below is Schulman's quote that encapsulates the entire billable hour debate in professional services firms.
"The way that a law firm works right now is that it's built on a pyramid. So that even if you assume that lawyers have their client's best interests at heart their entire economic model is predicated on numbers of billable hours billed. And so that doesn't teach or train or even necessarily reward the type of kind of solutions oriented, proactive thinking that is actually at the heart of what a corporation values and what I value. You're going to have to get used to making less money. But I can offer you rewards as a client that are non-economic but that will definitely add to value."
Within the legal community this is a raging debate and it has started to spill over into accounting firms, primarily through groups like the Verasage Institute. What is unique about this video is that it's one of the first times I have heard the debate articulated so succinctly from a client's perspective.
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