September 1, 2012

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Mixing It Up

Legal Billing Takes a Turn for the Non-traditional

Di Lewis

September 1, 2012

Gaylord says he’s found telling the client to pay what they think is fair has been effective in a select few cases. “It’s a risk, but as a law firm you want to do a good job. If it’s a savvy client they’re not going to nickel and dime you. They’re going to reward you because you really put out an effort.”

Even if you maintain hourly billing, Spendlove says there are many ways to keep it predictable and fair for the client. She says to bill promptly, include complete descriptions of work being done and keep clients advised of the progress and any future work needed.

“That way, clients can regularly measure the fairness of the work done against the charges made, and can make adjustments to how their matter is handled before the charges get too high,” she says.

New Normal
Spendlove says as long as non-traditional billing is serving both lawyers and clients, it’s here to stay. While hourly billing can work for certain parts of the legal industry, others are finding the benefits of working out a new type of fee structure are actually helping them build relationships with clients.

When the client sees you trying to work with them and they feel like you’re being fair, Gaylord says it cements the personal relationship that is so critical to doing business. “Our work is always built on relationships, and there’s a little give and take,” he says.

Hourly billing was not always the standard in legal billing and it won’t necessarily be the norm in the future, Gaylord says. It’s a moving target, and moving away from hourly to different billing structures is not a bad thing.

“I think that non-traditional billing models can be good where they can set expectations up front and provide certainty for clients and their attorneys,” Robinson says. “In order to accomplish this task, trust is fundamental. Trust between clients and their attorneys is best achieved by understanding the needs of both through honest and frequent communication.”

Clients are expecting and will continue to expect more from their lawyers, Robinson says, so alternative billing structures are here to stay. Whether they push hourly aside remains to be seen, but the ability to have more choice in legal help will keep pushing the bounds and ensure this trend will stick around.

The effect of these new billing trends may have both good and bad impacts on clients in the long run. The demand for more value per dollar may leave clients overlooking younger lawyers with lower rates, as they only want attorneys with a certain amount of experience, says Spendlove.

Gaylord says some clients aren’t willing to fund the education of an associate, saying they are paying for experience and expertise. This can either be good—they get an associate anyway, but the firm can’t bill for them—or bad, when they end up paying for a more experienced attorney when they could have paid less and gotten equally good work.

In the long run, billing will always be something of a negotiation process between predictability and fairness for the client and paying what an attorney’s time and expertise is truly worth.

“It’s always an evolving process and lawyers and clients need to be mindful of what those options are,” Gaylord says. “[F]or lawyers and for clients, don’t hesitate to be creative and don’t hesitate to think outside the box, because that might be what the client is looking for.”

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