It just doesn't know it yet. Turns out, a lot of lawyers don't know it yet, either.
New Year's Day marked the second anniversary of The Client Revolution. During the past two years, we've written and read many, many words about the death of the billable hour. And yet, despite the countless posts and articles on blogs and in magazines and newspapers, despite the many seminars and conferences and panel discussions, despite all the talk of the end of hourly billing, it's not dead yet. Not quite.
So what's keeping it alive?
Lawyers and law firms fear that if they stop keeping timesheets and stop tracking hours, they will make less money than they do billing hourly. And clients, especially in-house lawyers at larger companies, fear that without reviewing detailed time entries in stupefying legal invoices, they won't know if they're getting ripped off.
Despite this fear, both groups continue to express interest in so-called alternative billing. (See why I hate "alternative billing" — the term, not the concept.) Organizations are holding two-day seminars on all the different types of "alternative fee arrangements" (the faddish term of the moment). The problem is that people leave those seminars shaking their heads and muttering how complicated it all is. And then they go back to billing or being billed by the hour.
What The Client Revolution is all about is that pricing legal services is not at all complicated. It's simple. It can be difficult, I'll give you that. But it is simple. Here is the secret to pricing in a single sentence:
Figure out the value to your client of solving their problem, then set the price as close to that value as you can without going over.
Simple. But hard.
In 2011, the third year of the Client Revolution, I'm going try to make it less hard for lawyers and clients.
P.S. Over the past two years, we've had over 50,000 pageviews. My sincere thanks to all of you: readers, subscribers, commenters, and supporters. If you don't yet subscribe to The Client Revolution, please sign up now. I've set the price to, uh, free.