I can't imagine that this kind of mindset will last into the future. The way you set incentives drives behavior, so paying per hour for a law partner to talk to investors just gives him incentive to talk as long as he can, not provide you with substantial value. There has to be a better business model.
What new fee models won't change of course is the average cost. That's just a mater of supply and demand. If a service like this one say highlights bills for summer associates, and firms stop charging for them, then they'll just raise rates elsewhere. If you were willing to pay $X today for the overall service, you can only change X by increasing supply (say considering a wider range of firms instead of just big well known ones), or decreasing demand. Playing with the itemization won't do it.
If you pay them a fixed price for the job, their incentive is to do as few hours as possible, to ignore your phone calls and e-mails, to test/mitigate risk as little as possible, to push work back to you, to produce no documentation, to refuse any change of scope without a big cost increase, and to deliver the least they can within your contract. IT example: Elance
If you pay them by the hour, their incentive is to increase complexity, to investigate every possible risk in painstaking detail, to re-do work you've already done, to call and e-mail and hold meetings with as many people as possible for as long as possible, to produce more (and more carefully produced) documentation than you want, to interpret every cough and sneeze as an instruction to widen the scope, and to deliver late and over any estimated budget. IT example: Government IT and defense projects.
Theoretically it's possible to come up with an agreement that doesn't have either set of flaws - but in my experience if you've got the expertise and to do that, you've got the expertise and time not to need to hire outsiders.
Check out what Spark Capital is doing to help alleviate this problem: http://bijansabet.com/post/48787521538/picking-up-our-own-ta...
But yes, time-based billing sets up an inherent conflict of interest. Flat fee is great when it makes sense. Our company advisor setup a flat fee matter at his prior company to cover any phone calls or emails. No more watching the clock.
Flat fee billing is the better business model. It's not always possible, but it takes the stress out of watching the clock.