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Time to end billing vagaries: ACLA

Time to end billing vagaries: ACLA

The current financial crisis could force the legal profession to create a solution to the long-running debate about how it charges for its services, ACLA CEO Peter Turner said.

The current financial crisis could finally force the legal profession to create a solution to the long-running debate about how it charges for its services, Australian Corporate Lawyers Association CEO Peter Turner said.

Years of discussion about the vagaries of the billable hour had resulted in pockets of change but no resolution to uniformly overhaul the system.

And, despite widespread recognition of the failings of a system that could be said to reward inefficiency, Turner said time-billing still garners a great deal of support “even amongst general counsel and serious players in the inhouse sector”.

“It is the accepted system and everyone knows it and can work with it,” Turner said.

“Nobody, as yet, has come up with an acceptable, across the board alternative.”

Turner’s comments followed law firm consultant Ted Dwyer’s article in yesterday’s The New Lawyer, which statedthat although leading law firms produced work of exceptional quality, their services weren’t necessarily “good value”.

This was reflected in the results of a survey conducted jointly by ACLA and the Corporate Lawyers Association of New Zealand last year, across 125 corporate and government legal departments that showed only three per cent of inhouse counsel believed time-based billing was the best option.

“I guess everyone is interested in looking at alternatives now because the financial crisis has put everything into focus,” Turner said.

“We’ve been through the boom times and now we are going through the financial crisis, but I think inhouse legal departments are proving to be much more resilient than the law firms.”

Inhouse legal departments had continued to grow as companies attempted to increase the value received in return for their legal spend, he added.

“Nearly 30 per cent of the profession is inhouse now. If you go back to the ‘60s it was only something like 5 per cent. That trend is occurring both in the private sector and in government.

“All of a sudden we have moved back to very difficult times where budgets are very important. 

“My hope is that this drives the profession to some across the board, positive outcomes on how pricing should be measured, and where the emphasis is much more on value than time,” Turner said.

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