GlaxoSmithKline Says No to Billable Hours
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)


Summary: Is GlaxoSmithKline ushering in an era of alternative fee arrangements?

It turns out eradicating billable hours was not a hard pill to swallow. British pharmaceutical company GlaxoSmithKline has been requesting law firms no longer bill them by the hour, and it appears as if their wish has been granted. In 2015, 84 percent of legal work done for the multi-billion dollar company was performed under an alternative fee arrangement (AFA). This is a huge jump from 2008 when 97% of GSK law firm work was completed using the traditional billable hours model, according to


GSK’s campaign to end hourly billing was credited to the company’s general counsel Dan Troy. After arriving from Sidley Austin in 2008, he advocated GSK to seek legal representation using AFAs. According to GSK associate general counsel Bob Harchut, “The mission was to dramatically change the paradigm by which GSK paid for legal services. It was pretty radical to say we’re going to move every new engagement around the world, whenever feasible, to an alternative fee arrangement.”

Despite Harcut’s initial skepticism, he told that Troy insisted that AFAs would be a win-win for GSK and the law firms they worked with. So far, law firms view the change as positive, according to Harchut. He said the biggest challenge for everyone involved is ensuring GSK negotiates the fairest flat rate up front.

“How can we make sure we aren’t over or underpaying for value … that has been our Holy Grail,” Harchut said.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!

Busines of Law said that GSK’s high percentage of work performed using an AFA was “impressive.” In 2015, AFAs were only used in 9.4 percent of all legal matters, according to the Enterprise Legal Management Trends Report.

While GSK’s almost entire annihilation of billable hours is rare, it comes during a time when some experts are advocating that kind of change within the legal community. Because law firms operate by the billable hour structure, associates are expected to bill 2,000 to 2,500 hours a year. This leaves attorneys unhappy, unhealthy and burnt out, and it is said that this business model is a leading factor as to why women eventually phase out of the profession.

Harrison Barnes of BCG Attorney Search has advocated for more law firms to modify their current 60 hour work weeks to fit young attorneys’ values.

“Changing demographics in the United States over the last several decades have created a need for alternatives within the practice of law. Responsibility for the care of children and elderly parents has mandated that women create flexible arrangements; men also have either assumed or been forced to take on such responsibilities,” Barnes said. “Societal values have also changed immensely over the last few decades, contributing to the need for change within the practice of law. Concerns about health, fitness, and quality of life have made us into a nation of emerging “life-stylers”-people with interests beyond the immediate demands of our profession. Psychological testing and self-awareness tools also have enabled individuals to determine their own talents and needs, and they are acting on this information by creating or seeking work arrangements suited specifically to their personal situations.”

Photo courtesy of Bloomberg Finance

Do you think law firms should do away with billable hours? Let us know in the comments below.


Interesting Legal Sites You May Like




Search Now

Attorney with 8 years of civil litigation experience

USA-CA-Los Angeles

Westside law firm of our client is seeking an attorney with 8 years of civil litigation experience, ...

Apply Now

Senior Attorney with litigation experience

USA-NY-New York City

New York City non profit is seeking a senior litigation counsel to manage litigation strategy as wel...

Apply Now

IP Technical Advisor with 1-3 years of software experience


Alexandria office of our client seeks IP technical advisor with 1-3 years of experience in IP applic...

Apply Now

Litigation Attorney with 3-5 years of employment discrimination experience


Melville office of our client seeks litigation attorney with 3-5 years of experience. The candidate ...

Apply Now


Public Law Associate Attorney (General Municipal Law, Real Estate, Transactions)

USA-CA-San Rafael

Burke, Williams & Sorensen, LLP is seeking a skilled and motivated associate attorney with 1 to 3 ye...

Apply now

Corporate / Commercial Attorney | Lebanon, NH


Downs Rachlin Martin PLLC seeks an experienced corporate / commercial attorney to join its Lebanon o...

Apply now

Business Law Junior Associate | Burlington, VT


Downs Rachlin Martin seeks associate attorney with 1-3 years of experience to join its Commercial an...

Apply now

Business Law Associate | Burlington


Downs Rachlin Martin is seeking an attorney with 4 to 8 years of experience to join its very busy pr...

Apply now

Most Popular


To Top