Boston Law Firm Bans Billable Hour. I get their point, as billable hours does inhibit efficiency to some degree.
However, having now been on both sides of the billable hour madness, I can tell you that it is inefficient and does disincentivize certain behaviors. It was also pretty common in service industries, law is just lagging behind.
For example, in medicine you pay for procedures or the doctor's visit. While that makes drawing a line between what you got and what you paid for, it does not incentivize efficient care. The incentive is to have very short visits (so the doctor can get more in--just think--when was the last time your doctor's visit lasted more than 10 minutes) and to have multiple procedures and tests.
While per transaction or per action billing may work for many legal services--for example, the creation of a simple will or the processing of an immigration visa. It may not work well for other services--litigation being one. Lawyers and legal consultants could spend thousands of hours coming up with a billing schedule and it would be subject to constant revision. Is that worth the effort?