For at least the past 30 years, chargeable time has been recorded in units of six minutes. Various justifications are made out for the six-minute unit but, whatever the reasons, it’s just been a convenient measure because hourly rates can be divided by 10 to calculate the value of a unit.When almost all work was charged on an hourly rate basis, bills were produced by calculating the number of units spent on the matter and applying the hourly rate. Firms used to conduct annual ‘expense of time’ calculations to work out the cost of an employee, or the notional cost of a partner, taking account of overheads, and then apply a percentage (usually 50%) for ‘care and conduct’ – the profit element. Although there are sound reasons for continuing to conduct expense of time calculations, many firms have abandoned this practice since the advent of county court guideline rates. These firms tend to fix their hourly charges (without distinguishing cost and mark-up) at or around those rates, depending on the type of work being carried out.

The corollary of this has been that, even where work is charged at a fixed fee, firms have continued to time-record using the above method, so that the ‘opportunity cost’ of doing the work can be compared with the price charged. This has long been regarded as a good thing to do.

I wonder though, with what I have come to call ‘fixed-fee creep’ – the pervasive move towards fixed-fees or variations of them by a combination of regulation and market forces – whether we might have reached a tipping point where measuring the cost of work in units of six minutes is no longer relevant.

If the majority of work undertaken by a firm is charged at a fixed fee, shouldn’t the measure of its cost be an old-fashioned expense of time calculation of how much human, IT and other cost goes into doing the work, by reference to the true time taken, bearing in mind the increased speed at which work can be conducted with full use of technology?

If this is right, then maybe firms should consider measuring time spent in real minutes, so that they can work out what a piece of work really costs to produce and therefore how much profit is really being made.