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While firms were willing to drop their rates to accommodate flailing clients in the global financial crisis, only a small per cent changed their billing structures.
WHILE firms were willing to drop their rates to accommodate flailing clients in the global financial crisis, only a small per cent changed their billing structures.
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But despite firms' unwillingness to budge on time billing, clients are demanding more detailed explanations of exactly what they're paying for.
Within widespread commentary on emerging alternate fee models, most firms are still wedded to billing time, a new survey has found.
According to a survey of legal professionals by cost recovery software provider Stratatel Softlog, 80 per cent of respondents reported clients had reduced their spend on external legal advice as a result of the economic downturn, yet only 34 per cent adapted their billing processes to demonstrate the value of the services provided.
Not surprisingly, the majority of firms reported clients are more focused on their legal spend, with 86 per cent saying that customers either questioned an invoice or requested more detailed timesheets for work done.
According to the survey, lawyers have had to work harder for the same results as clients become more demanding, creditors more angry and debtors increasing dramatically.
“Given the current climate, it is surprising that so few firms have altered their billing practices to better reflect the value they have delivered to the client," said Matt Parry, the CEO Stratatel Softlog.
“Irrespective of the fee model, increasingly clients want detailed invoices fully describing the services provided as well as details of all other costs incurred.
“There’s no doubt the day of the one line invoice is well and truly over,” Parry said.
While accurately tracking and analysing time sheets and billable time is a key indicator for profitability, it also forms the basis of most alternative fee models.
“But whatever fee model is adopted, a firm has to be able to evaluate how much time it will take before it can project a realistic fee,” Parry said.
The survey found that an overwhelming 93 per cent of respondents still issue invoices based on time billing alone.
Also surprising is that even though 86 per cent of respondents have an automated cost recovery system, 80 per cent don’t believe they accurately capture billable time when they are attending to client matters away from the office or on their mobile phone.
