Rumors of the Death of the Billable Hour Have Been Greatly Exaggerated

2666304350_62fd7514eeOr so it seems to me.  Lately, there has been a variety of articles proclaiming the death, or impending death, of the billable hour.  So goes the argument: Billable hours misalign incentives between lawyers and their clients; law firms and lawyers have faced increasing pressure over recent years to redefine their business model and move away from the billable hour, at least in part; and in this economy clients have the motivation, the leverage, and the moxy to demand alternative billing arrangements from their lawyers.

In theory, this may be true, and perhaps large clients (as in those who spend enormous sums of money with their law firms on an annual basis) have put some of this theory into practice.  But I’m not so convinced that the billable hour has earned its demise quite yet.  For one thing I work as in house counsel at a Fortune 1000 company and I see very few alternative billing arrangements.  (For another, I used to work at a big law firm that also saw few alternative billing arrangements.)  That is due in part to our own taste for risk.  After all, alternative billing arrangements must incentivize both parties, meaning the client may end up paying more for a given set of services than it otherwise would have under a billable hour system.

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Thinking Like a Lawyer

150px-Paper_Chase_BookAt the start of each academic year, I cannot help but to think of Professor Kingsfield, the notorious contracts professor in The Paper Chase. The various classroom scenes where Professor Kingsfield grills student after student on classic contracts cases like Hawkins v. McGee have for years served as a sort of example of the “typical” 1L experience with the dreaded Socratic method.

While Professor Kingsfield surely sits at one end of the spectrum for professorial style, the Socratic method he uses endures.  It is, as one text notes, law school’s “signature pedagogy.”  It’s the way the law school professors across the country have been teaching law students about legal analysis for more than a century.

And students learn.  They begin their first year of law school with, to paraphrase Professor Kingsfield, “a head full of mush.”  Even by the end of that first semester, though, most 1Ls have developed an ability to turn that mush into cogent analysis, to make fine-line distinctions, to look for weaknesses in another’s argument, and to argue both sides of any issue; in other words, they learn to “think like a lawyer.”  This “thinking like a lawyer” is undoubtedly a necessary professional skill; however, mastering the process can come at a personal cost.

For all of the successes of the Socratic method, some have argued that it has serious flaws.  Most recently, Professor Elizabeth Mertz has criticized the Socratic method because of its “acontextual context.”  She notes that the Socratic method virtually ignores morality and social context in its attempt to teach students “objective” analysis.

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Low Income Employees Losing Income Left and Right

Moneychanginghands Steve Greenhouse over at the New York Times gives us the scoop about an interesting new workplace study by Ruth Milkman, among others:

Low-wage workers are routinely denied proper overtime pay and are often paid less than the minimum wage, according to a new study based on a survey of workers in New York, Los Angeles and Chicago.

The study, the most comprehensive examination of wage-law violations in a decade, also found that 68 percent of the workers interviewed had experienced at least one pay-related violation in the previous work week.

“We were all surprised by the high prevalence rate,” said Ruth Milkman, one of the study’s authors and a sociology professor at the University of California, Los Angeles, and the City University of New York. The study, to be released on Wednesday, was financed by the Ford, Joyce, Haynes and Russell Sage Foundations.

In surveying 4,387 workers in various low-wage industries, including apparel manufacturing, child care and discount retailing, the researchers found that the typical worker had lost $51 the previous week through wage violations, out of average weekly earnings of $339. That translates into a 15 percent loss in pay.

Part of the study’s findings were that employers of low-income workers were successful in intimidating them not to bring workplace claims, including worker compensation claims.

I actually think this study resonates with the current fight between unions and companies over the Employee Free Choice Act and the need for voluntary recognition of unions versus the need to keep secret ballot elections.

Really what this argument is all about is whether you are more concerned about union intimidation or management intimidation in the workplace.  I think, at least in the low income world, this study is further proof that employer intimidation is much more prevalent and impactful.  As someone recently put it to me: there is just something about an employer having the ultimate power of hiring and firing workers.

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