“Ultimately the billable hour will die”

A panel of legal experts has predicted the death of billable hours. What does this mean for how lawyers will deal with clients in the future?

The future of law will see the billable hour slowly being replaced by other types of payment according to leading legal experts who spoke at the University of Technology Sydney (UTS) earlier this month.
 
“I think ultimately the billable hour will die,” said Sharon Cook, managing partner, clients, at King & Wood Mallesons Australia. “I would imagine that less than 50 per cent of what we do would be on an hourly rate.”
 
Cook highlighted the current trend of legal panels bidding for work from clients on a fixed-fee basis as proof that this shift away from billable hours is already taking place.
 
Michael Williams, partner at Gilbert Tobin, agreed but said the future remained uncertain.
 
“There’s a bigger question about whether in fact lawyers are going to move to models which maintain, and in some instances actually increase profitability…”
 
Billable hours were “bad for lawyers in many contexts,” Williams said. “It’s sometimes been said that two thirds of the legal work that lawyers do is probably a little bit overpriced but one third is drastically underpriced.”
 
One obstacle is that certain clients still ask for services on a billable hour basis, he added. “If they perceive the value as being better delivered by a fixed amount, they’ll insist on a fixed amount.”
 
However the true value of a piece of litigation was worth more than the number of hours spent on it, Williams said, leaving it up to lawyers to implement better payment models in the future.

Watch the lecture below.


 

Recent articles & video

Chapman Tripp, DLA Piper confirm roles in SolarZero/NZGIF financing structure deal

Supreme Court refuses appeal in joint venture misrepresentation case

Legal changemaker shares insight on how to be a great lawyer and influence the profession for the be

Bill bolstering parental leave benefits passes first reading

Third annual Service Provider Awards now open for entries

Ex-EY global vice chair announced as new global CEO at Dentons

Most Read Articles

The most influential members of NZ’s legal profession for 2024 revealed

Lane Neave welcomes additions to senior ranks

New senior associates called up in MinterEllisonRuddWatts promotions

High Court reduces sentences in animal neglect case against horse owner