Alternative billing practices for greater flexibility, diversity & sustainability

News articles

Time-based billing has been the dominant model in the Legal profession and many other professional services and consulting firms for decades.  However, an audience at DCA’s recent Diversity in the Legal Profession Network hosted by Gilbert + Tobin heard emerging evidence that this may not be the ideal way to do business.

Whilst time-based billing is ostensibly an objective measure, it rewards inefficiency and creates pressure on lawyers, affecting behaviour and mental health, according to Pauline Wright, Member of the Law Council of Australia’s Equalising Opportunities before the Law Committee and partner at P J Donnellan & Co who spoke at the event. 

“High targets for hours billed each week, month or year create an expectation of total availability, which disproportionately affects women lawyers who often have greater responsibilities outside of work. It stigmatises part-time and flexible work practices, is a known stressor and is one of the most prevalent reasons for career dissatisfaction, particularly amongst women,” said Pauline.

In contrast, Pauline believes that value-based billing, where fees are fixed at the outset of a matter, is not only the key to a truly diverse workforce, but a driver for successful practices of the future.

“Value-based billing allows for flexible working arrangements, focuses on value for the client, rewards talent and expertise and thus creates an attractive business model for all. But it does need planning and good communication,” added Pauline.  She recommends:

  • Consulting with the client to determine what they value
  • Seeking to understand the needs and interests of all stakeholders
  • Exploring possible avenues for collaboration
  • Determining the risks for both lawyer and clients
  • Communicating regularly and consistently with the client to ensure that deliverables in progress are in keeping with the client’s expectations.

Melissa Lyon, Business Development Consultant at Hive Legal who also spoke at the event said her firm was established just over two years ago to offer an alternative approach to both legal professionals and clients.  Underlying the company’s culture is its belief in value-based billing. In the firm’s short history it has seen considerable growth – a testament to the fact that clients like what they have on offer.  Hive credits much of its success to its ability to appreciate and respond to the priorities of the market. 

“Rather than focus on time we focus on value.  Rewards are based on all contributions not just the ‘billable’ work.  Creativity and looking for alternatives, including technology-based solutions, are encouraged rather than more hours on a traditional task.  There is less control from the top and more trust. 

“Flexibility is modelled by all as the unquestioned norm: people go out of their way to ensure work (and meetings) fit in around personal commitments and presenteeism is non-existent. You can be an excellent lawyer and provide outstanding legal advice regardless of where or when you work,” explained Melissa.

Although an obvious benefit of this approach is the greater opportunity for gender equality, Melissa stresses that this approach has wider reaching rewards. 

“Such a system accommodates disabilities and cultural and generational differences as well as varying family and community commitments.  It fosters a healthier and happier team all around,” concluded Melissa.

To find out more about the fascinating discussion on alternative billing methods, DCA members can access the video webcast of the event by visiting our website here.

For more information on DCA’s Diversity in the Legal Profession Network or on becoming a DCA member, contact us at admin@dca.org.au