Evidently the chairman of America’s most august law firm agrees with me. In an essay published in the December 25, 2008 issue of Forbes, Evan Chesler, the managing partner at Cravath Swain & Moore, essentially calls for the end of hourly billing. While I find certain particular points in Mr. Chesler’s piece either silly (such as his referring to himself as a “trial lawyer”) or disputable (its not clear to me, for instance, that the billing regimen that Mr. Chesler endorses is really all that radical a departure from the hourly billing), I appluad his willingness to embrace new ways of thinking about fees. As I have said previously, hourly billing is pernicious in that it creates incentives for lawyers that are in direct conflict with their clients’ interests, i.e., the cost efficient resolution of their problems. Alternative fee arrangements, including contingent or partial contingent fees, flat fees with success premiums and the like, bring the lawyers’ incentive structure more into line with the client’s interests.

I somehow missed this when the story first came out, but Judith Regan, who recently settled her wrongful termination lawsuit against News Corp., has been sued by the lawyers who represented her in connection with that litigation, the Associated Press reports. The two law firms that represented Regan claim that she stiffed them on more than $40,000 in fees, and that she cut them out of the settlement. Also named as a defendant is Hollywood lawyer Bert Fields, who evidently helped Regan negotiate the settlement. Fields calls the suit “utter hogwash” and has threatened to file a claim for malicious prosecution. I’m not privy to the inside details on this one, but I’d wager that the lawyers have the better of the argument. And methinks that Mr. Fields protests too much, and too clownishly, as he appears wont to do.

That is the not terribly surprising message delivered by the new President of the California Bar Association, Jeff Bleich, as reported in a piece recently published on the American Bar Association’s website. as you might recall (or more likely, do not) I wrote some time ago about my belief that the billable hour system ill serves clients. I heartily agree with Mr. Bleich’s conclusion – the billable hour rewards sloth and inefficiency, pits the lawyers interests against the client’s, and tempts lawyers to engage in dishonest, if not outright fraudulent billing practices. As I have written previously, I am a firm believer in fee arrangements that more closely align the lawyer’s and client’s interests. The billable hour is perhaps the least likely to accomplish that goal, and poorly serves the client, and the legal profession, to the lawyer’s reward. That is a poor basis for a fee arrangement.

The ABA Journal reports that disbarred, discredited and disgraced former Durham District Attorney and former inmate Mike Nifong has formally requested that Durham should either assume his defense in the civil suit that the former Duke lacrosse players have filed, or pay for him to hire counsel. Of course he has. Nifong claims that he is entitled to this because the claims arose out of his work as DA. Under Nifong’s theory, a bank guard who participates in a robbery of the bank where he works would be entitled to have the bank pay for his defense against bank robbery charges because the charges arose out of the guard’s work at the bank. The man has no shame. None at all.

That was my question as I read an article in this morning’s Wall Street Journal on the move by certain large law firm lawyers in Manhattan to boost their hourly rates beyond the $1,000 an hour mark. Superstar litigator David Boies, who was quoted in the article, pretty well summed up what I expect is the reaction of most folks who live and work outside the cloistered world of the mega firm lawyers:

Frankly, it’s a little hard to think about anyone who doesn’t save lives being worth this much money ….

Being a firm believer in the free market, I figure that if these lawyers’ clients are willing to pay these fees, let them, regardless of how absurd or outrageous it might seem to pay a lawyer $1,000 an hour. I also agree with litigator Steve Sussman, also quoted in the Journal article, that alternative fees – contingent fees, hybrid contingent fees, flat fees and the like – are better for client and lawyer alike. Sussman says that his hourly rate is $1,100 an hour. His hourly rate is that high in part, he says, to discourage clients from wanting to hire him on an hourly basis. Yet further evidence of the perverse economics that the hourly billing system has bred.

It has long been my belief that the billable hour system, bu which many attorneys charge their clients and earn their livings ( and as I do, too for some matters, by way of disclosure) creates an inherent tension between the attorney’s interests and those of the client. If the attorney is being paid by the hour, doesn’t he or she benefit from taking as much time as possible, or at least as much as the client will be willing to pay for, in completing a task? Of what possible benefit is this to the client? This is a primary reason that I have started to use alternative fee arrangements, such as partial contingency fees, full contingency fees, flat fees and the like, for more matters, with the goal ultimately of using such arrangements in all cases. Even some in biglaw are now seeing the light. In an article in the August 2007 issue of the ABA Journal, best selling author and Chicago litigator Scoot Turow fairly well lays bare the flaws in the billable hour system. Whether Turow’s large law firm colleagues follow his lead or not, however, I intend to continue to pursue a full transition to alternative fees. My clients deserve nothing less.