Some Find Gain In Nonhourly Fees

The golden age of $1,000-an-hour billing continues to fade as U.S. law firms accept new fee structures, albeit reluctantly. Last year alone, more than half of law firms nationwide reported an increase in the percentage of their revenue garnered from nonhourly billing, according to the "2011 Law Firms in Transition" survey by Altman Weil.

Survey author and law firm consultant Eric A. Seeger says fee arrangements that forgo hourly rates are rising across the board, particularly at large firms.

But the shift is producing mixed results, and the profitability of the approach may hinge on a firm's business strategy. Just one-third of the firms surveyed had developed nonhourly billing arrangements to attract new business, while the rest provided them to existing clients only on request.

Of firms that reported they "proactively" offer flexible fee structures, more than 70 percent said that approach was at least as profitable as hourly billing. By comparison, 38 percent of firms capitulating to client requests said such deals were as profitable, and 42 percent said they were less profitable.

Nonetheless, attorneys expect the trend to hold: Three-quarters of respondents said they anticipate even more nonhourly billing in the future.

---