So what is an alternative billing system?  It is a term which probably

originated within legal blogs particularly in the United States but

which has come to mean fee arrangements that are either (a)

not based upon time recording or (b) where, although based

upon time recording include other mechanisms that limit the

final fee amount.

Death of the Billable Hour

In truth such arrangements have existed for years and can

incorporate multifarious elements and issues.  But a number of

factors have resulted in alternative billing systems having a much

higher profile; principal among these are increasing levels of

technology, the substantial change in the economy, a greater desire

for transparency and clients demanding tangibly better value for their

money.  Many commentators are predicting the

death of the billable hour and, as I made clear in my

speech to the 60th Anniversary Conference of the

Law Society of Scotland, I pretty much agree with

that assessment.

The general feeling is that the recession and

downturn will make that much closer the day of

reckoning for the billable hour.  Of course, some

areas of legal practice will always have some form

of time charge.  But I think that one can say with

reasonable certainty that within five years, the

charging arrangements for the vast majority of legal

work will not be based upon a purely time basis.

Many in-house departments will already be using feeing arrangements that

are either fixed fees or have some basis other than time expended.  But that

raises two questions; firstly are their current arrangements optimum for the

type of work involved and, secondly, is there a better basis for feeing

arrangements which are currently based upon the time?

And the winner is......value (not cost)

What are the drivers for changing feeing arrangements?  For a feeing

arrangement to be successful and sustainable, both the legal services

provider and the client must be content that the particular feeing

relationship represents reasonable value.  Of course, the issue of value is

subjective but it is capable of being reasonably ascertained through a

number of tests. 

lpc’s modus operandi is to look beyond traditional analysis and to consider

matters in their component parts coupled with the need for greater

practicability and efficiency. Such an analysis properly takes into account

the elements that constitute the charging environment. 

Benefiting from an alternative approach

For instance, in-house departments should consider whether they can carry

legally qualified or trained staff, but perhaps lacks certain expertise may well

be able to carry out parts of a particular type of matter or transaction and

refer to an external supplier for volume or expert elements.  The advent of

sharing technology particularly by Google and others, as well as the

widespread availability of e-mail (see last month’s lpc:in-house) has enabled

J U N E  2 0 0 9

The Scottish Local Authority Technology and Internet

Usage Survey 2009: does it foretell the future?

Five steps Inhouse can take to Transform Legal

from May 2009 featuring

c  2009 LawPracticeConsultancy.com

The lpc alternative

billing cube - it is all

explained on the

next page

LEGAL PROVIDERS

2

View Jonathan

Edwards’

presentation to the

Law Society of

Scotland 60th

Anniversary

Conference

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