Canadian Lawyer

OPINION survey of about 250 lawyers, "more than half acknowledged that the prospect of billing extra time influenced their decision to perform pointless assignments. . . ." Steven J. Harper, who has just published The Lawyer Bubble: A Profession in Crisis, noted recently that "fatigue through overwork can produce negative returns — the critical document missed during a latenight marathon review; the error in the draft of a corporate filing that goes unnoticed." Billing by the hour encourages substandard work and inflated bills. Worst of all, there is billing-by-thehour's big and dirty secret. Some lawyers cheat (that's the polite word). They "exaggerate" the number of hours worked. They do so in an attempt to increase income, or to impress superiors by meeting billing targets. All lawyers know that this happens all the time, although, needless to say, most deny it vociferously. Deniability is important when it comes to cheating. What is remarkable about billing by the hour is the absence of serious pushback by clients. Why do they put up with a silly system that leads to their being overcharged and underserved? It's because the only real alternative to paying by the hour is making a subjective judgment about the value of the legal services received. That's difficult to do. It's easier and safer to assess a legal bill arithmetically, just checking the multiplication of hours by rates. If simple multiplication is the accepted method, and the multiplication is correct, then who can complain? But if delicate judgment about the worth of services is required, why, your judgment could be called into question; you might be second-guessed; there could be a lot of trouble. Imagine you are a middle-ranking lawyer in the office of a large corporation's general counsel. You were in charge of an important transaction and hired the (mythical) Bay Street law firm colossus of Dibbet & Dibbet, known as "Dibbets," to help. One day Dibbets' bill arrives. It's big. It's very big. It's much bigger than you expected. It takes your breath away. Your boss, the general counsel, is not going to be happy. His boss, the CEO, isn't going to like it either. How to explain? The easiest way to justify the huge Dibbets' bill is to agree with the multiplicand, the hourly rate, and accept the multiplier, the number of hours worked. Hourly rates are normally set (read increased) annually and tacitly or expressly approved by clients without much fuss. That leaves the multiplier. If you believe the number of hours Dibbets claim to have worked, that's the end of the matter. The bill is OK and should be paid. All is well. Whew! As I say, it's a lousy way of doing things, easily leading to unethical behaviour — indeed, promoting it. But it seems the only thing that could subvert the billingby-the hour system is a general disbelief ntitled-2 1 in lawyers' claims about the number of hours they have worked. Once disbelief becomes general, it's all over. That would be a good thing. Thank you, DLA Piper, for your modest contribution to this desirable outcome. Philip Slayton's latest book, Mighty Judgment: How the Supreme Court of Canada Runs Your Life, is now available in paperback. Follow him on Twitter @philipslayton. From the court bench to the boardroom Collins Barrow is the ace in your pocket From one team of professionals to another, we respectfully submit that when you or your clients are talking audit, tax and business advisory services and solutions, you should call us up to the stand. With offices from coast to coast, Collins Barrow professionals can offer you the insights and opinions you need, combined with objective, actionable advice to help maximize opportunities in virtually every area of business. Geniuses count on Collins Barrow for clarity in numbers. www.collinsbarrow.com www.CANADIAN L a w ye r m a g . c o m June 2013 17 13-05-07 2:20 PM

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