By LISA VAN DER POOL
Boston Business Journal

Jay Shepherd is truly a rebel among lawyers.

Shepherd famously doesn't charge clients by the hour. He's a prolific blogger and tweeter. He's never worked for a big firm. And he thinks that sometimes, as a group, lawyers suck.

"The irony is, I'm married to a big-firm lawyer and all my friends are lawyers," said Shepherd, 42. "I know a lot of great lawyers, but as a group, lawyers just don't get business."

Instead of working as a big-firm associate after attending Boston College Law School, Shepherd took a job at a small employment-law boutique. Four years later he launched the Shepherd Law Group, an employment-law firm in Boston. Shepherd, who considers himself a businessman before he thinks of himself as a lawyer, charged his clients by the hour in the beginning. But it didn't feel right.

"I always hated tracking my time," said Shepherd, who lives in Newton, Mass., with his wife and two daughters. "Frankly, I didn't feel like I was doing assembly-line stuff. We're supposed to be knowledge workers. The idea of keeping track of six-minute intervals is absurd."

With his decision three years ago to drop the billable-hour method in favor of fixed fees, Shepherd instantly became known as a contrarian among attorneys.

He has gained national recognition as an outspoken critic of the traditional law-firm model. On top of his employment-law practice, Shepherd maintains two blogs: Gruntled Employees and The Client Revolution.

Shepherd thinks his mission to change how law firms do business has just begun.

"This debate has centered so much on the billable hour that people think it's about invoices and accounting methods, and it's not. It's about how we help people. It's the whole business model," he said.

Shepherd's clients love that he doesn't bill for every phone call.

"He's unique in that he's really trying to bring business-model innovation to a ... conservative profession, by nature. And that's an uphill battle," said Christopher Mirabile, an angel investor and former Shepherd client.

"The billable hour is just failing people. It's just not working," Mirabile continued. "Jay just said, ‘I'm not doing this. I'm going to do something totally different.' He's been able to boil it down and really focus on the core value. It's an innovative and refreshing way to interact with your lawyer."

For the first eight years of running the Shepherd Law Group, Shepherd billed clients by the hour. But soon after starting the firm, he began to research everything about the billable hour, including how long it had been in use and whether a fixed-pricing model could work.

Shepherd discovered that law firms hadn't always billed by the hour. In fact, most started to in the 1950s.

His next step was to analyze eight years' worth of bills from his firm, to figure out what was driving costs. Did his clients feel like they got their money's worth and did his firm feel like they got paid fairly? He'd read that you can't do litigation on a fixed-fee basis, and 80 percent of his firm's work is litigation.

"Now, after doing it for three years, I'm here to tell you, you can do litigation on fixed fees. It all comes down to, what is the service ... worth to the client?"

For every case, Shepherd researches the matter at hand and calculates a flat fee. He also has a concierge-type plan where clients pay a retainer and get unlimited advice - including free phone calls.

"One of the things I've heard clients complain about the most is the lack of certainty and lack of ability of lawyers to say, ‘This is what it's going to cost you,' " said Shepherd.

In addition to throwing out the billable hour, Shepherd thinks law firms should hire lawyers when they need them, adding that the hiring process at big firms is "crazy."

He gets about a dozen calls, e-mails and tweets a month from lawyers asking about fixed fees. So much so that he's considering doing consulting work on it.

"I don't like to see large law firms laying people off ... it's avoidable," he said. "We're so resistant as a group to thinking of ourselves as a business. But we are a business. We're not a priesthood. It's not a guild."