The death of the billable hour

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Submitted by Business Innova... on Wed, 08/23/2006 - 9:58am.
Fixed pricing for lawyers is remarkable. How can you make your pricing remarkable? Any industry traditions you can question? From Business Innovation Insider.

Christopher Marston.jpgDavid Maister links to an article he wrote about an innovative law firm started by Christopher Marston, a 29-year-old lawyer who is attempting to do away entirely with the notion of "billable hours" within the legal profession. Instead, his law firm has introduced "fixed price" billing for its clients. That's not all -- Exemplar Law Partners is actively hiring "non-lawyer" lawyers; offering clients a "satisfaction guarantee"; and promoting a "No Grinch" style of legal teamwork. Within the legal profession, of course, doing away with the notion of the billable hour and replacing it with a system of fixed price billing is about as disruptive as it gets. Below, David Maister explains Marston's motivation for starting a radically different type of law firm:

"Straight out of law school, [founder Christopher Marston] spent six months developing a business plan for a new kind of law firm. As he tells it: “What began as intellectual curiosity became in-depth research, which turned into a business plan.” Like most of his classmates, Marston was not encouraged by what he had heard about the life of a typical lawyer in a typical law firm, and even though he had won many awards at law school, he wasn’t tempted to join a traditional firm. “Lawyers are slaves to the billable hour,” he notes. “By measuring and rewarding billable hours, internally and externally, lawyers are actually punished for innovation — greater efficiency just reduces the bill to the client.” Accordingly, using every penny of savings he had accumulated from his previous activities, Marston launched Exemplar Law Partners, opening the doors to clients in January 2006."

For real-time commentary on the law firm of the future, check out Chris Marston's blog on Blogspot. Also, David Maister's article (originally published in the 2006 issue of InnovAction) has extensive commentary on the business model of Exemplar Law Partners, as well as insights into the role of innovation within the legal industry.

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[image: Christopher Marston]

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