The billable hour is not the immediate cause of all that ails the legal industry. Freedom from the tyranny of the billable hour would be a fine start. But there is much more to do and discuss. For proof, look no further than law departments. Many corporate law departments suffer from the same pathologies as law firms despite having cast off the perverse incentives of compensable time sheets.

The most common rejoinder to my suggestion that the billable hour is not the immediate cause of all evil in the universe is that law departments are populated by law-firm refugees. Whether or not this analysis is accurate, it concedes the basic point that culture, no matter the original source, is self-perpetuating and that simply eradicating the billable hour is not sufficient to drive the necessary changes. Law departments are filled with autonomy-seeking lawyers who, at a certain size, are highly unlikely to spontaneously organize into a well-functioning team. There are good reasons that traditional law practice has “no economies of scale” .

Rather, as law departments grow, they encounter the same diseconomies of scale that have plagued large law firms for decades. Progressive law departments have responded by moving away from being a law firm embedded in a company and, instead, have started to function more like the businesses they serve. Recent increases in and recalibrations of spend have been directed toward operations personnel and technology. Last year, for the first time, a majority of law departments used metrics. Last year, for the first time, a majority of law departments used an RFP process.

Corporate clients are displeased with their law firms. And the displeasure is not confined to opinion surveys. A decades-long decline in realizations has been paired with flattening of demand for external law firms. Overall demand remains on upward trajectory, but law departments are insourcing and sending increasingly more work to alternative service providers. It is abundantly clear that corporate clients are not satisfied with the status quo and that law firms will need to change to meet evolving client expectations.

But is it really that clear? Apparently not. Every year, Altman Weil asks managing partners why they are not doing more to change the way that legal services are delivered. Every year, the managing partners’ primary response is that “clients aren’t asking for it.” On first glance, it beggars belief that anyone could look at the data and reach the conclusion that clients are satisfied with their outside counsel. Except that isn’t what the managing partners are saying—other survey questions reveal that they are quite cognizant of client discontent. Rather, as a husband I can attest that it is all too common to be fully aware that someone special is upset with you without having the faintest idea why, let alone having any clue as to what, if anything, can be done to remedy the situation.

Clients complain that law firms are not cost-conscious or innovative. Clients believe that law firms are not doing enough to complement legal expertise with business processes and technology. In the traditional law firm model, there are literally, “no economies of scale.” So clients bring expertise in house, invest in technology, and unbundle legal services so the labor- and process-intensive activities can be sent to service providers deliberately designed to take advantage of economies of scale.

calls for “efficiency,” “cost-effectiveness,” and “innovation” are maddeningly vague. Beyond the serious few, clients have previously proven quite unreliable in following through on decades of strong public statements on more tangible initiatives like alternative fees and diversity.

In private, many partners wonder whether most clients would know efficiency if they saw it. These partners consider insourcing and alternative service providers to be pure labor and real-estate arbitrage. Almost every abstract discussion the partners have with a client about efficiency devolves into a concrete discussion about discounts. The discount discussion occurs with every firm and seems completely unmoored from how legal services are actually being delivered. Firms wonder what, if any, innovations clients will actually reward. It seems that no matter what firms do, clients are going to ask for the same discounts and writedowns. Why invest in innovation if clients don’t actually care—i.e., if clients aren’t asking for it?