I know,  you’re thinking it’s clients, not lawyers, who have the problem.  But we’re both right.

Consider antitrust:  A simple one word topic, like “will” or “license” or “negligence.”  But do you know that the ABA’s Antitrust Section has now 43 separate committees?  Check for yourself in my “Antitrust Resources” link.   Granted, not all those committees deal with substantive topics; there are only 27 of those,  focusing on everything from the Clayton Act (typically mergers) to intellectual property and international competition issues.  Speaking of which, there is also the IBA to consider, and the laws of around 100 countries that have adopted some form of antitrust regime.  One day the lawyer may be opining to the Board on whether a $15 billion acquisition of a competitor will survive DOJ and European Commission review.  The next day’s task may be 15 minutes on the phone brainstorming on how to implement a new pricing system without raising antitrust risks.  So how should an antitrust lawyer bill for those disparate services?

Traditionally, the billable hour has reigned supreme.  Even in today’s hyper-competitive world of legal services and tight budgets, most corporations seem hesitant about trying different models, as do most large law firms.  In major strategic deals with the company at stake, billable hours are the client’s friend.  Few law firms can “overcharge” in any real sense, assuming honest billing.  (If you don’t trust your lawyers, that’s a more serious discussion, starting with “fire them!)  The service is relatively price inelastic–after all, the bankers typically cost a lot more and work less hard, so who really cares if the partner’s hourly rate is $850 vs. $750?  Especially if the result is good.  

For most other antitrust services lacking apocalyptic implications, the billable hour leaves much to be desired.  Large firms do not make money doing 15-30 minute counseling jobs, even at $850 per hour.  Those services are loss leaders, keeping a foot in the door in anticipation of the big deal or case to come.  The client is often equally irritated with a bill of $300-400 for 25 minutes on the phone.  (Never mind that 30 years of experience and learning went into the advice provided.)  And God forbid that the lawyer, faced with “committee topic number 17,”  which only arises with the blue moon, should find comfort in triggering a research memo by some green associate who is anxious to impress with 32 pages of encyclopedic “on one hand, but on the other’s.” 

My conclusions, after some years joyfully laboring in the antitrust gardens, are these:  Clients, don’t begrudge the hours on the big deals, where your lawyers are up all night not to make a few extra bucks but to “make it happen” for you.  Ad hoc counseling on the vast array of other antitrust issues, by contrast, depends on expertise rather than hours, judgment rather than recitation, and nuance before black-letter dictates.   For that, dear Client, be open to other arrangements, such as fixed fees per month for “all you can eat.”  Lawyers, for their part, must start offering creative billing arrangements.  Take the risk of discounts for poor results along with success fees for happy endings.  And never put a junior antitrust lawyer on the counseling job unless you’re willing to write off most of that time– including the partner hours needed for close supervision.