[11:05 AM EST, January 2, 2009]:

From the consumer’s perspective, Ron, your use of Change Orders is significantly different than the auto mechanic getting prior approval for additional or unexpected work. The mechanic charges the same amount to perform Service A on Car Model Y, no matter if the customer came in specifically asking for Service A or the mechanic discovers that you need Service A while he has the car up on the lift for a general inspection or to perform a different service.

You, on the other hand, rub your hands in glee when you find a reason to present the client with a Change Order, because (as you suggest here and often say elsewhere) the situation gives the lawyer or other professional the leverage to charge the client far more for the added service than he or she would otherwise have been willing to accept for the same services or would have charged using hourly billing. You’ve bragged that the leverage that comes from bringing the change order to the client in the middle of a case or project can even result in fees many times the amount the lawyer would have accepted for the services. Using such leverage to extract a “value” or “premium” fee is questionable as a matter of legal ethics and fiduciary duty.

In addition, please note the irony that the auto mechanic charges a fee for Service A or B or C based on an established guideline of the time/labor that will be needed for a skilled mechanic to perform the service, plus parts. The fee for the service is the cost of replacement parts, plus the estimated labor cost (the time units required multiplied by the hourly rate that the mechanic has posted in the shop and stated on the invoice). The mechanic does not try to take advantage of the “value” to the customer of having the particular repair or replacement performed, given his or her urgent need to have the car back, or particular aversion to the risk of breaking down or having an accident if the work is not performed.

Lawyers and clients should know that your brand of Value Pricing, which promises lawyers higher fees than generated using the hourly billing method you condemn as anti-client and unethical, itself raises many ethical issues — especially when the client is not a sophisticated and experienced purchaser of legal services. For discussion and links, see my weblog post at http://tinyurl.com/ValuePricingRedFlags

As to the money back guarantee, you do not seem to understand or acknowledge the part of my argument that says a lawyer-fiduciary should not shift to the client the burden of contesting an excessive fee. A fiduciary makes sure in advance that the fee is not excessive. In addition, the fiduciary gives the client enough information (which includes how much work was actually being performed or likely to be performed and what the alternative billing method is likely to cost) to determine whether the risk premium — which also should be explicitly stated — is reasonable. (How much of a chance is there that the buyer would pay more using the other pricing method, and how much more is that likely to be?)

The fact that there is some risk reduction for the buyer and some risk increase for the seller does not automatically justify the size of a risk premium (especially when the lawyer is actually trying and expecting to charge more than he would have made under hourly billing). The fact that Baker is confident that the seller will increase profits by offering a Money Back Guarantee, suggests that the seller is on the whole charging a risk premium that is higher than can be justified by the risk being taken in providing the services.

Like many of Ron’s arguments, the variable rate mortgage analogy is a little off and not particularly apt, despite being partially true. One primary reason why a variable rate mortgage costs less than fixed rate at any one time is that the bank (or whoever later holds the mortgage) is taking less of a risk over the life of the mortgage. The buyer can also readily see and compare the different risks and decide whether to choose the fixed or variable.

I am not saying that a reduction in risk is not something valued by many clients. And, I am not saying “never give a money-back guarantee.” I am saying: Reducing the buyer’s risk does not justify the size of every risk premium and a money-back guarantee is no automatic assurance that a lawyer is charging an ethical and reasonable fee.

Your calling my ethical-fiducial-cost-based approach the “labor theory of value” does not negate my primary point: Lawyer fees are already too high in general under the hourly billing system. Constructing a new notion of “value” that is detached from the law firm’s costs and that generates even higher fees is not in the interest of many clients. At the very least, objective ethics experts should help create guidelines for the ethical application of value pricing methods when dealing with consumers who are not experienced buyers of legal services. Your calling hourly fees unethical and then charging even higher fees using Value Pricing is ironic and cynical.

P.S. Although I often use the word “buyer” or “consumer,” I refuse to give up the term “client,” because it reminds lawyers that they in fact do have additional obligations toward the buyer of their services than do sellers of products or services who merely sell to “consumers”. No matter what the ethics of selling popcorn in theaters or cashews in hotel rooms might be, lawyers have a higher duty than the sellers of those products.

I also understand your argument on guarantee but I think you are way wrong. Here is why, you are mixing up cause and effect. Customers pay for results not efforts. In short, you are still stuck on the labor theory of value. Effort in no way equate to value and your entire premise is based on this idea.

Money back guarantee can command a premium, that is Ron’s point. Certainty reduces the risk of the customer. Why are fixed rate mortgages more popular that variable? Variable are less expensive for the customer. It does not cost the bank any more to service a fixed rate versus variable, in fact, it probably cost them less! Why do people pay more? Certainty, less risk, and it is my choice as a customer to do so.

1) Your loaded question contrasting the nonrefundable retainer with a generic fixed-price-with-Money-Back situation is not very helpful for lawyers or consumers. I in no way support “unearned” non-refundable retainers (and, I have often noted many requirements necessary for hourly fees to be reasonable — the ethical lawyer does not merely multiply all hours “spent” on a client’s project by the agreed-upon rate). Furthermore, as far as I know, non-refundable retainers are not widespread and have often been condemned. (see, e.g., Simple Justice)

Knowing only that one fee includes a non-refundable retainer and the other is upfront-fixed-price with a Guarantee tells me nothing that helps me decide whether the particular fee is itself excessive. The first lawyer might work long and hard and earn much more than the refundable portion of a fee and the upfront fee might be immensely unfair from the start, given how little the lawyer will be doing for the client. Ethics issues are almost always fact-based, and surely depend on the sophistication of the client, so your loaded gotcha question does not advance our discussion. And, of course, saying “but he’s doing something worse than me” is no excuse for unethical conduct.

2) There are no absolutes when it comes to billing methods — each type comes with its own pro-and-con-consumer incentives. Hourly billing by a conscientious and efficient lawyer can be absolutely fair to the consumer when neither the lawyer nor client has any clear idea up front whether achieving the client’s goal will take a few hours or a few months of work. Conversely, pricing upfront when the lawyer knows (but the client doesn’t) how little needs to be done, can be very unfair to the client, and (as discussed here) a fixed price leaves the lawyer with the incentive to under-serve clients, especially when the firm is too busy or wants to reduce its expenses.

3) Of course, I have praised fixed pricing (and used it myself) — but that is in the context of lawyers offering services at a fixed price that is almost always less than the average hourly price for a particular service. My continuing concern over Value Pricing is that Ron Baker and other advocates have constantly told lawyers a) that they deserve to make more than they would make with hourly fees and b) that value pricing is the way to do so.

I’ve read some of Baker’s “Pricing on Purpose” writings and they — despite your suggestion to the contrary — are based on the premise and goal of achieving higher “premium” prices through value billing. That’s why, for example, he spends so much energy explaining and justifying why movie theater popcorn costs so much. [see more, e.g., in my post on Hotel Cashews and Baker praising such premium pricing and instructing his acolytes on how to achieve similar results.]

4) Finally, I simply am not persuaded that “nothing could be more consumer-friendly than a money-back guarantee.” First, as I said in a comment above and elsewhere, Model Ethical Rule 1.5 prohibits entering into an agreement for an excessive fee, not just collecting one.

Second, the Guarantee places on the client — whose trust the value-billing lawyer has worked so hard to cultivate prior to the engagement — the burden of asserting his or her right to a refund, despite not knowing how much work was performed or (in many instances) the quality of the work. Not many inexperienced clients are willing to ask for such a full refund, no matter how dissatisfied. And,

Third, Ron Baker — in a candid online moment — seems to be saying that the Money Back Guarantee is actually there as a money-maker (rather than an assurance of reasonableness). He says:

“Less than 1-2% will pull the trigger requiring you to issue a refund, but since you offer this to all your clients, you command a price premium from 100% of your base, more than making up for the 1-2% who call for a refund.”

That helps confirm my initial reaction to any Money-Back Guarantee: We usually see it with products (often on late-night tv) that are so overpriced, the seller can take the risk of giving a refund to the occasional customer who insists on one. For me, it does not give sufficient protection to the client against agreeing to an excessive fee.

That being said, will you answer my question? Who is more likely to be ethical a) someone billing by the hour with a $5,000 non-refundable retainer or b) someone who offer a fixed price upfront with a 100% money back guarantee?

You claim to be about the consumer, and while I am not a lawyer, I have been a consumer of legal services and hated the billable hour. I am not alone. One customer once said, “I am glad you stopped billing me by the hour, I alway thought it was a license to steal.”

Also, please stop assuming my motive, “value pricing” is not just about “premium pricing.” In fact, we at VeraSage begun using the term “pricing on purpose” to denote this. Pricing (setting a price before a transaction) is consumer friendly. Billing (value, by the hour, or otherwise means retrospectively charging for service) is NOT consumer friendly.

If we were just about “making more money” why would we advocate (in fact, we insist) on a 100% money back guarantee? What could be more consumer friendly?

It’s rather ironic that the person who keeps telling lawyers they deserve to be charging more and should use value pricing to make higher profits [that's you] is lecturing the consumer advocate who has consistently said that lawyers charge too much and mis-use regulation to protect themselves from competition [that's me] on the topic of competition policy in the market for legal services.

I have never said that value pricing is always unethical. I have said that an alternative pricing method that is sold to lawyers as producing higher fees than hourly billing requires scrutiny and guidance to assure that consumers have the information they need to protect themselves. And, I have pointed out that the less experienced a consumer is in purchasing and evaluating lawyer services, the more information the lawyer-fiduciary must supply and the more protection we must extend to the consumer against excessive fees.

Thank you for your economics lesson, Ron, but I think my dozen years analyzing competition and economic issues and refining antitrust theory at the FTC left me aware that perfect competition does not exist. That is why I have spoken of “workably competitive markets,” which give consumers many of the benefits of price and quality competition and can exist where there are sufficient numbers of rivals providing a product or service. The vast numbers of lawyers in America can surely provide the basis for such workable competition.

The difference between us is that I believe that the existence of market failure in the Legal Services Industry and market power in the hands of lawyers (due to entry restrictions, traditions that stifle rivalry, etc.) is the reason to provide clients with MORE information and ethical-fiduciary protection, while you preach that lawyers should take advantage of such informational imbalances and other competitive restrictions to extract MORE fees and profits from consumers (using, for example, your tricks to manipulate price sensitivity, and to exploit situational leverage by turning “change orders” into premium pricing opportunities).

It’s also ironic (but understandable given Sinclair Lewis’ insight) that someone who has “insulted” the vast majority of lawyers and law firms by saying that hourly billing is inherently unethical, should accuse me of insulting firms who use value pricing when I raise these issues.

[By the way, the fact that a law firm is big and famous is no reason to believe that everything it does is ethical. Just as calling a pricing mechanism "alternative" [as in "not hourly"] is no reason to give it immunity from ethical scrutiny.]

Whether a particular instance of value pricing or hourly billing is or isn’t unethical depends on the facts of the situation, including the sophistication level of the client. [Note: firms like Wachtell Lipton often have the kind of savvy client that can protect itself and insist on reasonable fees. My concern is primarily with the average "Main Street" client who does not have such experience.]

Unfortunately, your new subjective notion of “value” offers no standard to use to determine whether the client is being charged an unreasonably high price. Note, though, that if hourly billing is unethical, it is because it produces excessive fees, and yet you trumpet the ability of value pricing to produce even higher fees for law firms who use it. That is what makes me concerned about value pricing — especially in a world where most clients turn to alternative pricing in order to achieve lower fees, and who expect fixed prices to mean lower prices.

As for your “Golden Rule,” wise rules are never absolutist, but instead take into account different situations. [For example, "thou shall not kill" has some very important exceptions.] When there are good reasons not to price upfront, it is not “golden” to insist on doing so. That is especially true when the client does not have sufficient information to know when he or she is receiving a fair deal — e.g., whether a “certainty premium” is reasonable, given the likely range of fees that might instead be produced using hourly fees.

As usual, you raise far more specious arguments than I have the time, patience or energy to rebut. However, I do want to note that you are mis-using the concept of “price discrimination” when you give Apple as an example. Apple offers a higher-quality product at a higher cost, that is not price discrimination. You preach true price discrimination — charging different buyers different prices for the same service, based on whether the client’s psychological or financial situation means he has less price sensitivity. I will continue to ask whether such tactics are appropriate for lawyers, who have both professional and fiduciary obligations to treat each client fairly.

Given how weak and specious many of your arguments are, you should be pleased that I have not responded point by point. I returned to TAFL quite a few times in December to see if anyone had commented there, but stopped looking after a while. My life is not centered on this topic and I surely have no obligation to reply to the same old tired claims and ruses used by value-billing advocates. See my recent post on the Red Flags raised by value pricing and materials linked therein for more details. My main objective is to raise the issues so that consumers/clients can be on alert, ask relevant questions, and take steps to protect themselves, not to win debating points with people who have a financial stake in garnering “premium prices” through value pricing.

I won’t rehash the debate with you over this topic, but two points need to be made.

One, “perfect competition”–where price is equal to costs–is nothing but a model, not a depiction of reality. Pick up an economics textbook and look at all the assumptions made in this theory: consumers have perfect information; branding doesn’t matter (tell that to P&G), sellers are price takers, not makers, or searchers, etc. No market operates exactly like this, though computers emulate it, but even here, there is price discrimination based on value (ever buy an Apple?).

Two, the legal market has power due to its artificially keeping the supply of lawyers low with governmental licensure, always couched in the language of “protecting the public.”

I’m willing to concede some pricing power in the legal market if you’re willing to open it up to competition, as advocated my Milton Friedman, by eliminating licensure. He argued that was a government failure, not a market failure. Perhaps read his PhD thesis on this very topic.

I also have a post further explaining our position, including why hourly billing is unethical. If you believe in the Golden Rule, would you want every business to price by the hour? How many things do you buy where you don’t know the price up-front?

http://www.verasage.com/index.php/community/comments/the_billable_hour_debate_continuesregrettably/

There are many of firms out there that have adopted Value Pricing. To say they are unethical is not just insulting, it’s also not accurate.

Wachtell, Lipton, Rosen & Katz doesn’t price by the hour. Are you prepared they are unethical?

Regards,
Ron Baker, Founder
VeraSage Institute

As professionals bound by a code of ethics to avoid excessive fees, lawyers need to comply with a workable standard of reasonableness. Value Pricing offers no discernible standard. If “reasonable” merely meant whatever the client agrees to pay (which is what getting them to pay their perceived “value” suggests), we would need no rule against unreasonable fees — having a rule against fraudulently obtained fees would be enough. It is precisely because we cannot expect inexperienced clients to know the “value” of lawyer services, that an ethics rule was promulgated. [See our recent post on ethical issues raised by value billing/pricing.]

You seem to have missed the point of my computer example: If computers were priced in 2008 according to their “value” to the buyer (including the hardware and the ancillary services), they would be far more expensive than they were when first introduced. They are instead priced far lower, because competition keeps the price close to the sellers’ costs (which have gone down due to economies of scale and technological advances). Buyers expect sellers to pass along savings in their costs and sellers attempt to reduce their costs in order to stay competitive with their rivals. [The traditional meaning of "value," of course, is getting a good product at a reasonable price -- as measured primarily by the seller's cost -- and not merely the buyer's need or desire.]

As I said above: In a workably competitive market, prices stay close to costs. Only in markets that are skewed due to some form of market power or market failure (such as an imbalance of information) can sellers maintain prices significantly above their costs. In my opinion, as fiduciaries, lawyers should not attempt to exploit any such power to extract super-competitive fees from clients.

But the whole idea of value pricing – as per Ron Baker – is that your operating costs and your fees are 100% detached.

Yes, I do my best to reduce my operating costs but there is no way I charge less as a result. I charge what I charge for the value I deliver not for the costs I incur.

Business is about making profits not merely covering costs.

I would like to encourage anyone who is sceptical about value pricing to read some of the posts at http://www.verasage.com and they would have a better insight into value pricing, in my opinion the only ethical pricing formula.

***** Value-Billing and Computers: *****
I think here the value is not in the computers but in the ancillary professional services. It’s just a matter of asking clients what they want to achieve by having a computer.

First, I want to clarify your ‘red flag’ at the end of your original post — my first comment was comment #3, not comment #10.

In response to your comment #s11 and 12:

I agree that a premium fee is reasonable only where the premium is the result of added value to the client. But I do believe that some lawyers under-charge (or are under-paid) because they fail to articulate and demonstrate value to their clients and potential clients. Both lawyer and client must recognize the value of the lawyer’s services, and I see nothing wrong with educating lawyers about finding, creating and communicating that value.

Again, I think you are mischaracterizing what value pricing proponents are saying, but I’m not going to belabor the point.
I absolutely advocate education of the client by the value-billing lawyer and I have written and talked extensively about that education, about ensuring that the client understands the fee and what it is based on, and about demonstrating value to the client (which you seem to object to, by characterizing that educational process as something sinister meant to trick the client into believing the lawyer’s services are worth more than they are). But I don’t believe that education must include speculation about what some other lawyer might charge, nor do I think that education should include a made-up figure that the value pricing lawyer might charge if the value pricing lawyer were billing the client on a different basis. As I said in my previous comment, value pricing lawyers should certainly advise clients that not all lawyer charge on this basis and that other lawyers might charge an hourly fee. They should (and usually do) encourage the client to speak with other lawyers about their billing structure, fees, etc. And that is far more than many (if not most) hourly billing lawyers do – I don’t know many hourly billing lawyers who tell their clients that there might be other lawyers that would bill the engagement on a flat or fixed fee (or any other) basis and then proceed to quote them a possible fee on that basis.

The obligation of the lawyer to advise the client of the amount of time likely to be spent by the lawyer applies when the lawyer will be charging the client an hourly fee. Where the lawyer’s fee is based on something other than hours expended, I don’t believe that obligation applies in the same way. The client who is not paying by the hour really doesn’t care how many hours the lawyer will expend. The client who is paying by the hour is entitled to an estimate of the number of hours so that the client can calculate the full cost of the lawyer’s fee.
Of course, the fee must always be reasonable, as I said before. I’m not advocating offering the client an unreasonable fee. But reasonableness is often in the eye of the beholder – even with hourly rates, so smart consumers of legal services should comparison shop, just like smart consumers of any other product or service do. And that comparison shopping will be a lot easier if the client is offered a fixed fee than if the client is offered only an hourly rate. Offering the client a ‘reasonable’ hourly rate tells the client nothing about the total cost of the legal service.
An informed value pricing arrangement doesn’t work based upon guesses about anything. It is based upon the client’s reasonable expectations for service and outcome and the lawyer’s ability to meet or exceed those expectations. There’s no guessing involved.

Based on my experience and the experience of my (lawyer) clients, your statement about clients paying or being willing to pay a reasonable fee is an over-generalization to say the least. There are many other fields aside from criminal law in which payment is a problem and in which clients are NOT reasonable.

I completely disagree that not giving the client an estimate of another lawyer’s potential fee is to keep the client in the dark. As I noted in my last post and in my other writings on this issue, I believe that the smart value pricing lawyer will tell the client that other lawyers may charge differently. But I don’t believe that it is incumbent upon the value billing lawyer to give an estimate of the total legal fee that could be charged by another lawyer – nor do I believe that any lawyer or firm does so now – even if they charge on an hourly basis. They might say that there are other lawyers who charge more or less per hour, but I don’t know of any lawyers who speculate about the total cost of legal services that might be provided by another lawyer or firm. To imply that it is only value pricing lawyers that don’t provide these figures is misleading.

I also never said that the value pricing lawyer should remain intentionally ignorant of his competitor’s hourly rate or even of the ‘going’ hourly rate in a given jurisdiction – but telling a potential client that another lawyer might charge $400/hour for the same engagement isn’t the same as telling the client what that lawyer (or law firm)’s total fee is likely to be. I think it would be irresponsible for lawyer A to try to provide a client with an estimate of lawyer/firm B’s likely fee for the engagement. It’s an impossibility, since lawyer A has no way of knowing how lawyer/firm B is likely to staff the engagement or how much time will be expended, etc.

As for a standard of reasonableness, I repeat what I said earlier, which is that every lawyer is held to the same standards of reasonableness contained in the ethical rules. Those standards apply to every lawyer, including those pricing their services on a value basis. The same goes for fiduciary and other protections which lawyers are obligated to provide to clients – there is nothing in a value pricing system which reduces or eliminates these protections – and I have seen nothing in what you’ve written to convince me otherwise. The client in a value pricing situation often gets MORE information from the lawyer about the fee structure, the actual price of the legal services and the scope of services to be provided than a client in an hourly billing situation does. I don’t see how an hourly billing system “uses the market’s power to bring the price down to the provider’s cost” any more or less than a value pricing system does– what is the provider’s cost? How can you determine what the ‘cost’ of a lawyer’s experience, knowledge, expertise, skill and innovation is? How, exactly, is that done in an hourly billing system? Certainly the lawyer’s hourly rate isn’t specifically determined by cost, and hours aren’t the only measure of cost or value.

I’m not sure how an hourly billing system prevents a lawyer from entering into an agreement for an excessive fee, either – particularly where the client can’t possibly know what the fee will be until after the work is done. And I disagree that the value pricing system alone puts the burden on the client to request a refund. Many lawyers who bill on an hourly basis require clients to pay an up-front retainer. On occasion, the lawyer requires an up front retainer equal to what the lawyer believes the total cost of the service will be. At other times, the up front retainer is required to be replenished as work is performed. In those instances, the client is also in the position of having to ask for a refund. I find nothing inherently problematic in that situation. Regardless of fee structure or billing system, clients will always have difficulty assessing the quality of a lawyer’s work. That’s just the nature of the beast; clients will often judge quality based upon outcome, regardless of whether that is a fair assessment or not – and often the outcome achieved isn’t commensurate with the quality of the lawyer’s work.
Value pricing using fixed fee agreements by definition fixes the fee in advance. The only difference between what you describe (and I’m not sure that your assumptions are accurate with regard to Lincoln) and what I advocate is that I don’t believe that most legal services can be priced on a flat (i.e. same price for each client) versus a fixed (price set in advance of work to be done) basis because I do not believe that there are many services which are the ‘same’ for each client.

Where there are strict commodity type services which are similar to a ‘product’ which can be mass produced, flat fees are fine. But most legal engagements involve too many variables to price every engagement the same, and each client has different expectations for outcome and service which will also affect the price. But I won’t belabor those points now, as I have written about them in other places.

You insist on mischaracterizing the inability to price every engagement on a flat fee basis as “wait[ing] to see how rich, scared, obsessed the client is, and then they price-discriminate (using information gained in confidential sessions with a person to whom they owe fiduciary duties) by charging more to the client who has less price sensitivity and the disposable income.” I have never advocated pricing on any such basis, as you are aware from previous exchanges. And, by definition, the hourly billing lawyer prices every engagement differently because their pricing is based upon time expended, regardless of whether the engagement appears to be ‘the same’ at the outset. Even ‘the same’ work can be priced differently when using an hourly fee structure – one lawyer may be faster or smarter than another lawyer; or the same lawyer may be tired or slow or hung over one day, etc. Why should the client bear that burden? By contrast, some clients may require more hand holding, more meetings, different forms of communication, multiple contacts with the firm. Some opposing counsel is less reasonable and more litigious than others. Isn’t the lawyer entitled to be compensated for those differences?

Since you are so adamant that the value billing lawyer should price all ‘similar’ engagements the same, it is curious that you have cited to ABA Op. 94-389, which specifically indicates that lawyers using contingency fee arrangements should, “treat each case and client separately, when deciding on the appropriateness of the arrangement and the reasonableness of the agreed-upon fee.” It seems to me that, when it comes to value pricing, you are arguing the opposite.

No pricing system or billing structure is perfect. As Mr. Greenfield points out in his comment, no fee structure is going to cure all potential problems between lawyers and clients, and the potential for some lawyers to take advantage of clients exists regardless of what fee structure they choose. As I indicate above, many of the problems that arise are problems which could be encountered regardless of which pricing system or fee structure a lawyer chooses. Many of your criticisms could apply equally to hourly billing, depending upon the individual attorney or firm’s ethics and practices. Although you criticize the value pricing model, you seem to do so with limited understanding of how and why the principles are being or could be ethically applied, and with little support that your criticisms do not apply to other, more mainstream billing structures.

I won’t address your comments about Ron Baker’s writings or the reasoning behind what he writes – you can address him directly for those.

Since I have spent far more time over the past week responding to your blog post than writing my own blog, I will end my part of the discussion for now.

I think Dan Hull is quite cute. Not Mick Jagger cute, but quite cute nonetheless.

As a criminal defense lawyer, I don’t really have a horse in the billing race, but my belief is that it’s like most ideas, a benefit in the right hands and a weapon in the wrong.

With a desperate client, it’s an excuse for extortion. With a calm client, it can be a means of honing legal fees to more appropriately suit a reasonable business decision.

To label it a panacea is to be overly simplistic or disingenuous. Lawyers have an extraordinary ability to find ways to abuse clients, particularly when it comes to billing.

And Dan Hull is personally responsible for most of the problems we have with the Slackoisie. He travels a lot, you know.

Although you have some fine reasons for not correcting misinterpretations of your weblog posts, I want to offer one very good one for doing it: You are known for your insightful and client-oriented commentary and what you say is respected and influential. Leaving a misinterpretation uncorrected — especially when a topic is important and complicated — does a disservice to those who give a lot of weight to what you have to say.

Law surely is a business and its practical demands cannot be denied, but I absolutely agree that law should be much more than that, and clients deserve more deference (and protection) than if we were merely a business. As Australian Legal Services Commissioner Steve Mark said last year in a paper on Alternatives to Time-Based Billing, no “clash exists between profit and ethics . . . The only clash is between ethics and greed.”

While market forces do not do a good enough job, in my opinion, keeping lawyer fees down, they surely are a constraint on those who would otherwise increase them even higher and more often.

Yes, Baby Boomers have helped to create a new generation of greedy little lawyers. But, each lawyer can and must decide for himself or herself whether greed and badges of prestige are more important than seeking a balanced life that respects the obligations that come with our profession and that uses legal talent and energy to serve our clients and give them as much value as possible.

It may seem overly-simplistic, and hokey, but keeping the client’s interest first does organize things for me. You watch out for a client’s getting value whether or not the client–especially a long-standing one–monitors whether it’s getting value. That’s why law is not quite 100% a business–it’s a profession and a trust, too. Think about what an associate one year out is really worth. The “correct” hourly rate? I really don’t know. But I DO know it is NOT a function of market forces, folks. That’s just fraud.

Finally, to those who imply (as WAC? has) that the associates who are complaining about life these days are spoiled jackasses and weenies: if they are, it’s become pretty obvious lately that we (boomers) made them. They are our monsters.

Dan