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How Can Lawyers See the Value in Value Billing If No One Will Tell Us What It Is?

It's another big week in the blogosphere for proponents of the alternative billing systems known as "value billing."  In this blink post at Between Lawyers, Dennis Kennedy directs us to Ron Baker's Three Steps to Value PricingWhat About Clients? blogger Dan Hull  links to another Ron Baker post, If You Don't Discuss Value, Expect to Discuss Hours.  Even Michael Fox of Jottings By An Employer's Lawyer gets into the act with this post on how clients disgusted with the billable hour are seeking out plaintiffs' contingency lawyers to handle their cases. 

I can understand the contingency concept as an alternative to the traditional billable hour.  And as this article describes, clients have gotten fed up with the billable hour, because they feel that the billable clock starts ticking every time their lawyer picks up the phone or walks down the hall to the copy machine.  Moreover, the billable hour gives lawyers incentive to overcharge.  By contrast, one lawyer said the following:

"But time and money both motivate contingency fee lawyers, says Davis' partner Mike Slack. "We have to be lean and mean," Slack says. "We're engineered for speed and efficiency." He says this means that contingency fee lawyers' interests are aligned with their clients' interests.

This makes perfect sense to me.  What doesn't make sense is "value billing."  I read both of Ron Baker's pieces and Googled "value billing," and I just can't find a tangible example of what it is.  There's all kinds  of amorphous advice about providing "service guarantees"  and emphasizing the value that  your service will bring.  Heck, I guess I'm a simpleton, but I thought all of that was part and parcel of our professional obligation as an attorney, whether we bill by the hour or not.

And though "value billing" is supposed to benefit clients, the one definition of value billing that I did find -- in an article from Entrepreneur Magazine advising potential clients on how to hire a lawyer wasn't very favorable:

"Value billing. Some law firms bill at a higher rate on business matters if the attorneys obtain a favorable result, such as negotiating a contract that saves the client thousands of dollars. Try to avoid lawyers who use this method, which is also sometimes called "partial contingency."

And David Giacalone has has offered several scathing criticisms of value billing as a way for lawyers to bilk clients for more money.

So to all you advocates of "value billing," instead of using the billing lingo that's the equivalent of psychobabble, can you provide me with case studies, actual examples of where a lawyer applied "value billing" and the client was happy with the results?   After all, I'm a lawyer -- and if I can't understand "value billing," how can a client?

Posted by Carolyn Elefant on June 13, 2006 at 03:07 PM | Permalink | Comments (8)

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