How does hourly work for lawyers anyways? You're clearly exempt so under federal law you're not required to be paid hourly, but most lawyers get it anyways. Is it just tradition?
So it depends on the case. Some cases, you get paid hourly. Other cases, you get a contingency fee (if you win, you get a % of the settlement/judgment).
If the case is hourly, the client is taking all the risk; but on the flip side, the client is going to reap the rewards. For example, if the client thinks the case will settle at an early stage, they might think hourly is to their advantage since they will only pay us for the work we actually do. On the other hand, if a case goes to trial and appeals, contingency can be to the clients advantage since they only pay us once we win (can be years away) and they never take anything out of pocket.
There are also hybrid compensation schemes where we discount our hourly rate by 50% and take 1/2 the normal contingency (for example), there are other splits too. Other clients like to do goalpost type pay, win a motion to dismiss you get X, clear summary judgment you get Y, although those are rare.
As for me personally, yes I am exempt and I get a salary but I also get a lot of bonus pay depending on my hours and when we get contingency cases settled. My bosses are firm believers in paying us all percentages when we get a big settlement. I even got a $15k check when we settled a $290M patent case when I was a summer associate. The size of my yearly (but sometimes twice yearly) bonus is also directly dependent on the number of hours I bill during that bonus period. So I would classify my compensation as hybrid.
There are also a fair # of cases that are required by law to be hourly: family law cases come to mind.