As I have written before the really smart time debate in the legal profession has moved from do I continue to bill solely by time (does any firm?) to do I offer a range of billing and pricing options including time based billing?
Unsurprisingly I say, unequivocally, no.
There are a multitude of pricing options available to firms without firms needing to resort back to and retain time based billing.It of course goes without saying that if you retain any form of time based billing you need to retain timesheets, but if you truly want to move away from billing by the hour you must not only (eventually) ditch all time based billing but also burn your timesheets. I elaborate on the reasons I say this in this piece penned for Lawyers Weekly “Why timesheets are damaging to your practice”.
The reasons often given for retaining timesheets have been debunked over and over. See for example this post “Timesheets are terrible cost accountants”
More and more empirical evidence of the benefits of moving away from the insidious time recording culture the legal profession has leeched onto are out there for those that are genuinely curious or would like to see how they too could make the move.
Or this interview of one of Australia’s most experienced and respected Legal Cost Assessors Liz Harris from Allocatur Consulting on “Why clients want to pay for results not time” discussing how you can practise law without timesheets.
Or just look at those innovative law firms that have made the move away from time based billing and have dumped timesheets- which in Australia include the aforementioned ViewLegal, together with Moores, Marque Lawyers, BBV, Hive Legal to name a few.These firms have realised that to move away completely from relying on the traditional leverage based model of time x people x hourly rate does not simply mean introducing a different billing or pricing model but morevoer an entirely different business model.It requires a mindset change.True that is what often makes it harder and more difficult to implement and get traction from within,but also that is what makes it much, much more rewarding for them,their clients and I believe for future generations of our profession.
Moving away from time based billing is of course not without its challenges.See for example this very practical recent post by Jocelyn Honour headed “Value Pricing:Obstacles & Opportunities for Professional Firms” on her experience, observations and learnings in moving a firm towards value based pricing.
Educating and teaching professionals to price by value and not by time is not of itself difficult. What is difficult is the amount of unlearning professionals have to do. Regrettably some will never, or will never want to,unlearn.
* with apologies to Ash