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Letter to the Editor: In defense of effective billing

Letter to the Editor: In defense of effective billing

If firms did a better job at conveying and value, clients would not give a boot about time spent. John Chisholm writes.

I refer to the article headed “Time Billing Still Preferred by Firms”, appearing in the The New Lawyer edition 27 January, where Matt Parry, CEO of time capturing software provider Stratatel Sotflog, refers to a survey commissioned by his company among some legal professionals.

Whilst I am unable to comment on the survey itself, nor the percentages quoted by Mr Parry, it does not surprise me that the survey showed that “...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”.

I refer to his comments about a tighter economic environment, where a law firm is unable or unwilling to price its services up front (or at best only provide an estimate or range of its price), and therefore enters into an arrangement with its client only explaining its method of charging, that is to charge solely according to time in six minute increments. Of course some of those clients are going to increasingly question and challenge what the time was spent on and whether it was “justifiably” spent or otherwise.

Such questioning or requirement for more detail is hardly an example of a trusted lawyer/client relationship. Such firms might say they have this relationship with their clients but [they do not] if the relationship is primarily centred around time input rather than outcomes and value provided.

Mr Parry goes onto state that “there’s no doubt the day of the one-line invoice is well and truly over”. 

For firms and their clients buried in the mire of the billable hour, this may well be the case. But for an increasing number of firms and their clients who mutually agree on the deliverables, and the price to be paid for such deliverables at the beginning of a matter, the one line invoice will suffice and the firm and client can both move on and focus solely on the outcomes to be achieved.

If clients get an effective result, along with a fixed price before the work begins, they won’t care about time, apart from elapsed time. Do you get to see Ford's internal cost accounting before buying a car? If firms did a better job at conveying and communicating value, clients would not give a hoot about time spent.

“Accurately tracking and analysing time sheets and billable time..” is not a key indicator of profitability. 

Having clients who appreciate the value of the services you provide to them, pricing those services accordingly and being paid for those services is [a key indicator]. 

And here’s a hint to the readers of The New Lawyer: If you want to know what some lawyer in your office did with their time during the day - try asking them.

John Chisholm is the director of Chishom Consulting, which advises law firms. 

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