The Legalpreneurs Sandbox Episode 6 - The Real Value of Legal Advice - Hint: it’s not measured by time!
The love/hate relationship with the billable hour remains as topical as it is controversial in legal practice today. It’s been an integral part of how lawyers have valued their services for a while now but, we’re in different times so, does that mean we need to think differently too about what and how we value what lawyers do?
The billable hour has also served, within law firms (and legal departments), as a proxy for things like productivity, utilization, performance, compensation, rewards and promotion. And, that probably needs to be reviewed too. For example, can you really measure a person’s contribution to legacy building and employee retention through coaching and mentoring; or continuous improvement, efficiency and effectiveness through innovation and creativity; or client relationship building, satisfaction and retention…by the hour?
We spoke with John Chisholm, Liz Harris and David Wells from the Innovim Group about all this and more. These folks are Australia’s leading legal services pricing gurus and, they also know a thing or two about running a successful legal business.
Topics covered in our conversation included:
- The difference between billing, pricing and value pricing?
- The whole billable hour thing – the pros, cons and everything in between.
- The alternatives to using the billable hour:
- For calculating “fix a fees;”
- For measuring productivity; and
- Tracking where people spend time.
- Why lawyers struggle with letting go of the billable hour.
- Want happens if the client wants you to bill by the hour.
- Should lawyers price their own work?
- If a legal business can change from billing time to value pricing without changing the business model.
- Whether or not there is a link between legal innovation and not selling time by the hour.
- And, a little crystal ball gazing about how lawyers in private practice will be measuring their revenue in the near future.
Thank you so much John, Liz and David – we so appreciated your time – non-billable, of course!
You can also read or watch John’s 10 Tips and Traps in Making the Transition to a Value Pricing Model on the CLI website.