US firm bosses in spat over billing

A row over the future of the billable hour has erupted between two of the highest-profile law firm leaders in the US.

A row over the future of the billable hour has erupted between two of the highest-profile law firm leaders in the US.

Earlier this year Evan Chesler, chairman of Cravath Swaine & Moore, called for major changes to the way law firms bill their clients, saying: “The billable hour makes no sense, not even for lawyers” (23 February, Rev Counter).

Now Peter Kalis, Chesler’s opposite number at K&L Gates, has responded. Kalis was one of a group of managing partners quizzed last week by The Lawyer for an upcoming article on whether the current economic downturn represented a paradigm shift for the world’s leading firms. In response to a number of questions on this topic, Kalis took a shot clearly aimed at Chesler.

“The paradigm shift has a number of key implications for our industry,” Kalis argued. “Enlightened law firms for years have been offering alternative fee arrangements to clients. To hear a leader of a Wall Street firm recently issue a clarion call for alternative fees was amusing.

In response, Chesler called the comments “unfair” and said he had been talking about alternatives to the billable hour since before the economy declined.

“Generally what clients want is more of what they’ve wanted for some time,” Chesler added. “That is, to control their costs, including the cost of their outside legal services, and to match those costs against the value they receive.

“This is a facile comment by somebody who is not well informed.”

The full-length feature, which will include a broader discussion of this topic, will appear in the 30 March issue of The Lawyer.