Tuesday, October 11, 2011

Conflict of Interest


When you say "conflict of interest" to an attorney, they assume you mean that there is some factual nuance or position in the client's case that impacts another client or maybe the attorney's personal life.  Most attorneys would say that conflicts of interest arise rarely in their practices.  I would submit, however, that every time a client hires an attorney and agrees to pay a fee that is based solely on hourly rate times the billable hour, a conflict of interest is created.  In that case, conflicts of interest arise for those of us in the Trenches every day.  Why do I say that?  The basis of the hourly rate billing system is that what the attorney is selling is time.  Not knowledge, not expertise, but time.  The system was created as an internal time management tool to measure the productivity of law office personnel, and lawyers, not having been trained in business management, used this internal tool externally.  Back when all word processing was done on an IBM Selectric (for those of you who have never seen one, like our Erin, click on the link), and retyped for each client, things took a long time.  Now, we use computers and scanners, so most law firms have basic forms that they use to begin the drafting of most documents, at the very least.  If attorneys are selling time, the newest client gets a bargain and the first client pays a fortune - for the same document. The inherent conflict of interest in the billable hour system is that attorneys get paid more the longer they work, so there is no incentive to be efficient, whereas, clients want the best legal representation they can obtain at the lowest price. Sure sounds like our interests are different, doesn't it?
The funny thing is, contrary to public perception, most lawyers don't like the billable hour.  We're not fond of it (read "hate it") here in the Trenches.  What is hard is figuring out an alternative that is fair to attorneys and clients alike.  Fixed fees work for some things but not others.  Value billing? The question is whose value and how do you determine it?  An hourly rate that blends hourly and value billing? Perhaps.  The debate goes on and on.  Do any of you have an opinion?

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