Sir Nigel Knowles, joint Chief Exectutive of DLA writes in the Telegraph"that lawyers and legal firms need to evolve and embrace the changed market conditions. While there will remain some circumstances where the billable hour is justified, my firm conviction is that its relevance is shrinking considerably and it will rapidly become an anachronism. "
"My firm is seeing more and more clients demand to be paid on a fixed-fee "retainer" basis, or on a capped fee arrangement as opposed to the billable hour. Firstly, this establishes a collaborative culture based on trust where the right amount of time is taken for important business decisions rather than a race against the clock in the interests of keeping a lid on costs.
There is a cynical view of lawyers that – rather like a gas expanding to fill its container – the scope of work under billable hours will expand to fit the maximum budget. Eradicating allocated units of time in favour of a retainer would immediately put an end to this perception.
Secondly, and perhaps more importantly, it would engender a system predicated on prevention rather than cure which would head off problems – legal, regulatory, compliance, financial – at the pass. My theory is that, embraced widely and implemented properly, this would result in the wheels of Corporate Britain turning far more smoothly and, critically, far more cost effectively."
There are two clear issues.
1 Law firms need to provide alternative fee structures for clients. At my firm we offer a blend of fee structures including the traditional hourly rate, but also fixed fees, best estimates, retainers, capped fees and no win/no fees.
2 Law firms need to provide effective dispute resolution tools for clients. This includes mediation, mediation training and fixed fee redundancy consultancy. Again these are tools which progressive lawyer and human resources consultancies welcome as they enhance the client experience.
Justin Patten, Principal at Human Law