Memo To: Partner Lisa Grimble at Business&Comp From: Natasha Rao, Associate at Business&Comp Date: November 5, 213 Subject:

The Current Economic and Social Pressures on Lawyer Per your request, I have conducted some research in regards to the problem we are currently having in terms of increased competition and disagreement with our billing system. The details given throughout this report pertain both to our company's specific situation as well as to the conditions of the general field of law. Information is listed in the following order: The Problem, Significance of Problem, and Approaching The Problem . THE PROBLEM At this time many law firms, like our own, are having problems in acquiring new clients and in maintaining respectable reputations. According the articles written in the Guardian and, law practice coach, Allison shields, clients are becoming both unwilling and unable to keep up with the standard "billable hour" approach law firms use to bill clients. In fact, clients are beginning to question the entire "hourly" billing system and the rates. This has lead to a severe decrease in the number of clients our firm has received over the past few years. We are unable to maintain our previous billing and hourly targets. Alex Aldridge, from The Guardian, has thoroughly explained that this system is based on law firms setting some sort of target hours for partners and lawyers within the company. By setting a standard they are not only creating a goal for themselves, but also a goal for their competitors to exceed. This billing approach is detrimental to law firms not only through their clients but also with "inner turmoil" within the company and in terms of competition between law firms. Law firms begin to raise and fluctuate their yearly and individual target billing hours according to standards set by other firms. This only creates unfriendly competition between companies and adds unnecessary stress on the partners working for those firms leading to unhappiness on the corporate and individual level. In other sources, the Board of Governors' from the State Bar of Wisconsin show that competition in the field of law no longer solely stems from direct competition between law firms. This competition may now arise from customers resorting to the use of cheaper and more easily accessible resources like accountants, realtors, financial advisors, or even the Internet. The Board ultimately declares that not only is the internet giving our competitors an advantage in terms of increasing their ranges of marketing and target audiences, it is also giving clients opportunities to solve problems without our aid.

The various sources reviewed, to answer your original questions, lead our firm to the conclusion that billing hours are decreasing our cliental not only through monetary/financial discouragement, but also through increasing the availability of other competing law firms and easily accessible alternatives.

SIGNIFICANCE OF PROBLEM Cliental disagreement with our billing system and the rate of our fees gives new clients very little incentive to seek our law firm out for help. This directly affects our firms revenues and the firm's ability to pay, our top lawyers their well deserved, bonuses. At this point, we are no longer only disappointing our clients, but our employees as well. This deteriorates our firms reputation not only in the eyes of the public, but also in our own work environment. APPROACHING THE PROBLEM

A complaint in regards to our law firm was filed publicly online via a website provided by The Guardian. A client expressed that law firms "charging by the hour isn't conducive to getting a good deal [...] [because] is encourages the filling of time - by, for example, placing [...] slowworking junior lawyers on a job that a more experienced [...] [lawyer could handle in a shorter amount of time] - rather than efficiency" (Aldridge). The issue has become more severe as the economy continues to fluctuate in healthy. People feel that they cannot afford to/ do not need to use lawyers. In this "buyer's market, the client determines what services are needed and at what cost" (Haines 5)

However, these problems appear to be fixable. Through the research I have conducted, I have found a variety of techniques, suggestions, and ideas that can be implemented in order to slowly fix our reputation as a reliable and cost efficient aid. 1. The Board of Governors' from the State Bar of Wisconsin states that "the billable hour will survive for some time" (Haines 6). There will always be situations in which alternative billing is not an option due to the lack of predictability within an assignment/ case. However, it is apparent that we are going to have to move toward the mixed price billing system in which we can utilize a combination of fixed-fee deals and our hourly billing. Before doing this we must consider the most efficient way to allocate our resources in order to make this system possible

2.

In order to keep up with our competition, we must focus on "adding value and increasing efficiency" in the services we offer (Haines 6). In order to do this, our firm must always be able to adjust our rates and services in accordance with the current technology available.

- Need to further address issues - Find more resources - Look up more potential solutions - Create an appropriate close

Aldridge, Alex. "Corporate Lawyers Must Make Every Minute Count but Is Hourly Billing Still Necessary?" The Guardian. N.p., 19 May 2011. Web. 25 Oct. 2013. <http:// www.theguardian.com/law/2011/may/19/corporate-law-firms-hourly-billing>. Haines, Kimberly K., Kevin G. Klein, Christine R. Barden, Robert W. Swain, Lynn R. Laufenberg, Athenee Lucas, Nicholas J. Vivian, TJ Molinari, Michael J. Remington, and Joyce R. Hastings. "The New Normal: Challenges Facing the Legal Profression."Reinhart Law. Reinhart Boerner Van Deuren, July 2011. Web. 20 Oct. 2013. <http://www.reinhartlaw.com/Services/BusLaw/CorpGovern/Documents/art1111 TE.pdf>.