The Va. Couple that Brought Us the Billable Hour, Exhausted Lawyers
For the Virginia State Bar, the minimum fee schedule was just good business, and lawyers found to be charging less than the suggested fee for a service would be presumed “guilty of misconduct.” For Ruth and Lewis Goldfarb, and the class of Virginia plaintiffs they headed, however, the minimum fees charged by the legal profession constituted price-fixing and were therefore — rather ironically — illegal. In 1971, the Goldfarbs had contracted to purchase a home in Reston, Virginia, and as part of securing a mortgage, were required to hire a local attorney to conduct a title examination of the property. To their horror, and after calls to several dozen attorneys in Northern Virginia, the Goldfarbs discovered that the minimum-fee system made bargain hunting for legal services a rather pointless exercise.
Four years and no doubt substantial legal fees later, the U.S. Supreme Court agreed, ruling in Goldfarb v. Virginia State Bar that minimum-fee schedules violated federal antitrust law. Many law firms had heeded the ABA’s clarion call before Goldfarb and started billing by the hour (and keeping better records), but when the Supreme Court kicked the minimum fee crutch out from under the ailing profession, it was clear that the billable hour was the way forward, and by the end of the decade the system was firmly entrenched.
Read the article “The Va. Couple that Brought Us the Billable Hour, Exhausted Lawyers” on ozy.com.