A recent study of some of the most sophisticated law firm clients has shown that a clear majority of clients (84 per cent) want fixed price billing from their lawyer.
Despite this, resistance to change and innovation in the legal profession is deeply entrenched, and time-based billing remains the preferred choice for most law firms.
The majority of law firms use the “6-minute unit” to charge their clients to complete particular tasks. However the benefits to clients of using this system have since disappeared:
“With no gauge for intangibles such as productivity, creativity, knowledge or technological advancements, the billable hours model is a counterintuitive measure of value.”
The much-publicised criticisms of this existing model include:
- Rewarding inefficiency and dilatory practices (the more time they spend the more they are paid;
- Uncertainty and “bill-shock”; and
- Discouraging innovation and time-efficient solutions to clients’ needs.
The authority on the future of the future of the legal profession has said:
“No longer will the law be meted out occasionally on the basis of billing by the hour.
One solution to this problem is offering consumers of legal services a genuine alternative to time-billing based on the outcomes the law firm achieves rather than the time they spend. Pragma is willing to offer this model of pricing to all of its clients: we use up-to-date technology that allows us to send our clients proposals that specify prices according to outcomes rather than time spent.
You can watch the video above to find out more.
In 2002, Justice Steven Breyer agreed with one practitioner that “the profession’s obsession with billable hours is like drinking water from a fire hose, the result is that many lawyers are starting to drown.” Justice Steven Breyer, Associate Justice of the Supreme Court of the United States
“Clients truly despise a system of 6 minute units…If you think clients do not sometimes feel like this, I think you need to get out more. Clients should not have to pay like this for process, and they should not do so. What they should be prepared to pay for, and what they do not begrudge, is paying for real skill and experience.” Chief Justice James Allsop AO, Chief Justice of the Federal Court Australia
“In my fervent hope that we actually get rid of hourly billing, so that lawyers will not be expected to bill 14 hours a day and we can all go home at 5pm to see our children.” Tae Royle, Head of Digital Legal SMajor Law Firm 6
 Katie Walsh, ‘Companies want lawyers to kill the billable hour’, Australian Financial Review <http://www.afr.com/business/legal/companies-want-lawyers-to-kill-the-billable-hour-20170619-gwu2yd>
 Scott Turow, The Billable Hour Must Die, ABA Journal, Aug. 1, 2007.
 The Future of Law, Richard Susskind, Preface (x). 1998