find the latest legal job
Corporate/Commercial Lawyers (2-5 years PAE)
Category: Corporate and Commercial Law | Location: Adelaide SA 5000
· Specialist commercial law firm · Long-term career progression
View details
Graduate Lawyer / Up to 1.5 yr PAE Lawyer
Category: Personal Injury Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Mentoring Opportunity in Regional QLD · Personal Injury Law
View details
Corporate and Commercial Partner
Category: Corporate and Commercial Law | Location: Adelaide SA 5000
· Full time · Join a leading Adelaide commercial law firm
View details
In-house Legal Counsel & Commercial Lawyers
Category: Corporate and Commercial Law | Location: All Sydney NSW
· Providing lawyers with flexibility and control over when they work, how they work and who they work for.
View details
In-house Legal Counsel & Commercial Lawyers
Category: Corporate and Commercial Law | Location: All Melbourne VIC
· Providing lawyers with flexibility and control over when they work, how they work and who they work for.
View details
GCs key to fixed-fee revolution

GCs key to fixed-fee revolution

In-house lawyers will determine the speed with which fixed-fee pricing is adopted by law firms, the former senior counsel for Bovis Lend Lease has claimed.

Stanislav Roth (pictured), founder of Source Legal, will be speaking on fixed-fee pricing at the Thomson Reuters Business of Law Masterclass conference in Sydney on Thursday (23 August). He claimed that in-house lawyers are “critical” to the demise of hourly rates.

“They are in a very powerful position – they are the biggest consumers of legal services and they are also the most astute and influential,” he told Lawyers Weekly ahead of the event.

“Armed with this knowledge, in-house lawyers can negotiate with law firms fixed-price or retainer-based arrangements for specified or all legal services.”

Russian-born Roth drew parallels between hourly rates and communism in his native country. “No one would have believed communism could collapse in one day, and the same will happen with hourly rates ... it will happen very quickly.”

Adoption of fixed-fee pricing will be accelerated when one or two “visionary firms” abandon hourly rates, he continued. “Others will then follow the same way they did with mergers.”

Roth believes fixed fees are inevitable for two reasons: increasing pressure from clients for more cost-efficient pricing models, and a growing number of young lawyers demanding flexibility in the workplace.

“The time-based model is inconsistent with the lifestyle and mentality of the younger generation,” he said. “[Young lawyers] don’t want to be cogs in the wheels  ... they want flexibility and to work from home, which will put pressure on firms to abandon hourly rates.”

To support his position on fixed fees, Roth cited the 2010 Legal Department Benchmarking Report, which revealed that while most consumers of legal services dislike hourly rates, it remains the predominant method of pricing.

The report also found that only four per cent of in-house lawyers consider hourly billing to be the best approach of pricing legal services, yet around 70 per cent of total external legal spend is based on standard hourly rates.

Source Legal, which uses a fixed-fee pricing model, also outsources “in-house style” legal consultancy. Roth explained that this makes legal services accessible to a larger range of clients, particularly mid-sized companies that are not large enough to recruit a full-time in-house lawyer.

He claimed a number of these companies are underserviced and choosing not to engage law firms for minor legal work due to budgetary pressures. Among those that do engage firms, many are given “Rolls Royce” service they don’t need, he added.

“This type of service is overkill for mid-sized companies and more clients are seeing the benefits of a unique model like ours” he said.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

GCs key to fixed-fee revolution
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Dec 11 2017
Warm welcome for new district court judges
Three practitioners who were appointed as district court judges in WA have been congratulated by ...
Lawyers welcome same-sex marriage reform
Dec 11 2017
Lawyers welcome same-sex marriage reform
Australian lawyers have welcomed the recent legalisation of same-sex marriage, after a prolonged nat...
Senate disallows double standards for temporary visa holders
Dec 8 2017
Senate disallows double standards for temporary visa holders
Lawyers have welcomed the Senate’s rejection of regulations imposing strict penalties on temporary...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...