The co-founder of an innovative north west firm has said it will scrap the hourly rate for its fee earners.
Marcin Durlak, managing partner of IMD Solicitors, said the firm is now in the final stages of implementing a new charging system.
The firm already operates a four-day working week and now wants to challenge the assumption that the pricing of work should be based on time.
Durlak said: ‘For me, this feels like a natural progression. Our culture has never been about how many hours someone spends sitting in front of a screen.
‘It’s about the output we produce and the outcomes we achieve for our clients.’
There have been examples of firms publicly rejecting the billable hour approach but these have tended to involve ‘platform’ firms which operate on a fee sharing model with their lawyers.
Gunnercooke has removed time recordings and billable hours, while Keystone has announced a similar method in the past. Setfords has no billing targets for its fee earners, saying this freedom ‘allows them to focus on the quality of their work rather than purely on quantity’.
But so-called ‘traditional’ firms have been less inclined to ditch the billable hour, although there is an acceptance among many that the increasing use of AI may require a fresh look at how clients are charged and on what basis.
Durlak said that with technology and AI able to deliver some legal work significantly faster than previously, it makes sense to adjust the billing model accordingly.
He added: ‘A client doesn’t really care whether something took a lawyer ten hours or two.
‘They care about the problem being solved, the outcome achieved, the certainty they receive and ultimately the value delivered. I think the legal profession will increasingly have to rethink the relationship between time, price and value.
‘For us, moving away from hourly billing is another step towards building a law firm around outcomes rather than hours.’
He explained that this was about a ‘cultural and commercial mindset shift’ and stressed that it was not simply a case of replacing the billable hour with a fixed fee.
Clients will have three service options, which can differ in scope, pace, access and the level of senior involvement. Durlak said this gives clients genuine choice, as different clients value different things and they can choose the level of service that is right for them.
He also rejected the idea that ditching the billable hour might automatically mean that lawyers have to reduce their fees.
‘If technology allows a lawyer to produce an excellent outcome in significantly less time, why should greater efficiency result in a lower fee simply because fewer hours were recorded? Clients are ultimately buying our expertise, judgement and the outcomes we help them achieve — not units of time.’
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