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Economic crisis renews debate over legal billing

Thu, Oct 23rd 2008 12:00 am
WASHINGTON (AP) - The economic crisis is triggering changes in the ways law firms charge for their services, among other things.

In the Washington, D.C., area, law firms are considering alternatives to hourly billing as their clients struggle to cut costs. Critics have long said it gives lawyers an incentive to work inefficiently.

In-house corporate lawyers are leading a drive to get rid of hourly billing. A recent survey by the Arlington, Va.-based Corporate Executive Board found that in-house lawyers spent 50 percent more last year on large outside law firms than in 2002. They said the hourly rates they paid jumped 70 percent between 1996 and 2005.

Robert Ruyak, chairman and managing partner of Howrey LLP, said corporate clients including Procter & Gamble, Qualcomm and GE Healthcare began prodding the Washington-based firm last year to help them save on legal bills.

Washington-area law firms are also seeing a drop in work in mergers and acquisitions, litigation and commercial real estate.