As a litigation consultant, when I advise clients and the occasional law firm about value-billing, I face a dilemma. On paper, value-billing often looks advantageous, but clients accustomed to hourly billing are reluctant to experiment with alternatives, especially when they hear their lawyers grumbling.
Hourly billing provides little incentive to settle early or to litigate cost-effectively.
Instead, it rewards overstaffing and goldplating of cases. Even if counsel do not intentionally churn the case, their fees are open-ended and unpredictable. The drawbacks of hourly billing have put pressure on clients to find alternatives, but their fear of the unknown is even greater, which discourages them from trying alternatives. Meanwhile, most law firms see value-billing as a euphemism for aggressive discounting of legal fees, so they avoid it like the plague. Client anxiety and firm reluctance may slow the growth of value-billing, for now, but a body of experience and information about alternative billing methods is growing.