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Legal fees in flux could push efficiency

Dec. 29, 2009 at 5:14 PM

NEW YORK, Dec. 29 (UPI) -- Quality and billing among U.S. legal firms is in flux due, in part, to the recession and attorneys finding themselves out of work, evidence shows.

The National Law Journal said the Top 250 law firms in the country have downsized payrolls by 5,259 lawyers since 2008, the sharpest drop in more than 30 years, The Chicago Tribune reported Tuesday.

Concurrently, an increasing amount of legal work is being paid for by "alternative" billing, which is code for work performed at set fees, rather than billed by the hour.

Microsoft Corp. general counsel Brad Smith wrote recently that 45 percent of the firm's legal work will be done with alternative billing arrangements in the near future.

By paying a set fee for a particular job, law firms will be forced to be more efficient. The standard per hour fee structure tends to encourage inefficiency, the Tribune said.

Time will tell if the switch to alternative billing becomes a trend that grows or even sticks.

Michael Roster, chairman of the Value Challenge for the Association of Corporate Counsel, predicted legal work not billed by the hour will grow 25 percent by 2012.

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