Pretty much everyone involved in the
legal profession in any meaningful way spends much if not most of his/her time
trying to allocate costs. Whether you’re a judge structuring a judgment or
consent decree, a litigator structuring a settlement, a transactional attorney
structuring a deal, or a legislator or regulator structuring new rules or laws,
you’re inevitably left with the fundamental question: “Who is going to bear the
cost?” Indeed, any transaction between two or more parties (and even parties
acting alone, if you consider externalities) implicates questions of cost
distribution.
This is why it is absolutely
mind-boggling to me that law firms – ostensibly the veritable pinnacles of rationality
and enlightened self-interest – overwhelmingly employ a direct billable-hour
model, a model which creates perverse incentives and uncritically distributes
costs inefficiently and inequitably.
O, let me count the ways:
