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BILLABLE HOURS DON'T ADD UP TO GOOD LAW, REHNQUIST SAYS

Why, asked Chief Justice William H. Rehnquist, are so many young lawyers so unhappy? After all, the pay is better than in decades past, and the quality of lawyering is just as good or better.

The answer, he said yesterday in a graduation address at Catholic University's Columbus School of Law, seems to be that at many firms the practice of law is becoming a business, where once it was a profession.Rehnquist told the 264 graduates that they were joining about 800,000 lawyers in the United States. They should think carefully, he said, about what kind of law they wish to practice and why.

"Market capitalism has come to dominate the legal profession in the way it did not a generation ago. Law firms, whether in 1956 or 1996, have always had to run a profit . . .. But today the profit motive seems to be writ large in a way that it was not in the past."

The result has been that partners in large firms leverage the earnings of associates, he said, and there's an increasing emphasis on billable hours. Charging clients based on hours worked on a case, said Rehnquist, "rewards inefficiency" and also makes clients very cost-conscious and thus less loyal to a particular firm.

In years past, clients and lawyers shared "an element of trust and understanding which may be diminishing today," Rehnquist said. If a firm merely counts up its hours and bills accordingly, "there isn't any great difference between the law firm on the one hand, and the office supply vendor who simply counts the number of pencils furnished and sends a bill for that amount," the chief justice said.

The emphasis on profits via billable hours also has diminished loyalty among law partners, he said. He contrasted today's environment with his years in private practice, when "there was a personal relationship built up among lawyers in the same firm which meant that income-producing ability, though a very important factor, was not the sole basis on which the status of a partner depended."

The billable hours approach, in which time is money, Rehnquist said, has had two other major results: Large firms cannot economically justify taking small cases, and settlements are more common because the cost of "having a large matter tried by a large firm is so staggering." Thus, litigation departments of large firms may be generously staffed, but the lawyers may have little actual trial experience.

Rehnquist offered one "positive side" to these changes in the practice of law. That is, he said, that large firms in large cities will pay a great deal of money. Although Rehnquist never criticized this option, he urged graduates to consider what they want out of life.

"Don't forget that in choosing a job, you're very likely choosing a lifestyle," he said. "Just as time is money in the law practice, don't forget that your supply of time is no more inexhaustible than your supply of money."