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1、1Pros,Cons&Technology8 legal experts on the future of the billable hour2Hi there,Since weve founded Henchman,I have discovered that only few topics make for a heated discussion like the billable hour.I must say,I had some fascinating conversations with legal practitioners on the subject.And many of
2、them agree:the billable hour is under pressure.It will become increasingly hard to stay ahead of the race by only billing by the hour.The system feels outdated,and it doesnt challenge law firms to cultivate a competitive advantage or price based on offered value(speed,specific expertise,the commerci
3、al value of the contract,etc.).However,moving away from this way of working is not apparent:billing by the hour ensures no surprises for the lawyers,in case the scope changes.For the clients,on the other hand,the billable hour feels uncomfortable and sometimes like writing a blank cheque.They dont n
4、ecessarily want it dirt cheap,they want predictability and budget forecasting.And if the discussion wasnt complex enough,adding technology to the mix might be the icing on the cake.The type of legal work changes under the influence of legal tech.So that made us wonder:are there hybrid possibilities?
5、And do we leave it up to the client to choose what kind of pricing she prefers-by the hour,hybrid or value-based?So that made us wonder:Shouldnt tech efficiency be rewarded in a way too?Are there hybrid possibilities between value and time-based billing?And do we leave it up to the client to choose
6、what kind of pricing he prefers-by the hour,hybrid or value-based?Weve asked eight legal experts where they stand.And,interestingly enough,we got just as many different opinions.Discover them for yourself:I hope these different points of view can serve as an inspiration.And Im curious to hear where
7、you stand too.So dont hesitate to let me know.You can always reach me at Jornhenchman.io for the proverbial digital coffee break.Best wishes,Jorn2Billin till the day we dieBin the billable,or die trying3Jana Blount 4Change Maker at DLA PiperWilliam Woodford 6Founder at Avantech LawRichard Tromans 8F
8、ounder of Artificial Lawyer&Tromans ConsultingLaura Rosseel 9Senior Associate at CambrianDavid Turney 11Co-Founder and Managing Partner at Avery LawSteven Ongenaet 13Head of Service Delivery at NEXLEve Vlemincx 15Attorney&Stanford GSB Executive Educator&ConsultantTobias Heining 17BDMC Director Osbor
9、ne Clarke Germany,ELTA Board MemberContents4Change Maker at DLA PiperFor all the talk about the billable hour and whether it should stay or whether law firms will move to different pricing models(some have);we are still not seeing an industry-wide radical shift in pricing discussions.Why?I dont beli
10、eve it boils down to merely lack of will or trying,but because it requires a fundamental change in the way the legal industry places value on its work.Self-reflection and self-evaluation of the existential type is no small feat-especially when it is into a collective self.Of course,partners can and
11、do discuss alternative fee arrangements and can put forward a capped fee or fixed fee arrangement.Still,at its core,the arrangement will factor in things like how much time the work will take and by how many lawyers,who,of course,will be compensated by how many hours they work in a year.In order to
12、shift away from billable hours,the legal industry must shift its thinking on what value lawyers provide and then price according to those metrics.The existential question then is:What is the value of legal?Why do people need/want lawyers,and how do you price on that?Jana BlountThe existential questi
13、on then is:What is the value of legal?Those are far-reaching questions that impact business models,compensation packages,and ways of working.However,a new development outside the legal industry could force introspection:the four-day work week.The number of young lawyers stating they would like to le
14、ave the legal profession in the next five years is staggering 1.The great resignation is already causing law firms to rethink(mainly through upping bonuses and salaries).But what happens when the four day work week comes into play?The UK is currently trialling a four day work week with 30 organisati
15、ons2.I think the country collectively has its fingers crossed and breaths held as we pray that those participants remain as productive as ever during this pilot,but this led me to think-could this work at a law firm?How could it be with the way things currently are?If this is the future,how do law f
16、irms operate 5within it?Would lawyers have to cram all 1750 billable hours into even fewer working days?That does not seem feasible.But it also does not seem possible to the next generation of lawyers coming through the ranks that their lives are filled with billing time.Without new lawyers coming i
17、n,the pyramid structure loses its base.Without new lawyers coming in,the pyramid structure loses its base.Without a base,there is no structure and no one to bill.This brings us back to the need to find new ways of engaging and discussing the value lawyers bring to a deal,a company,a person,or a busi
18、ness.The last question I then have is how might the legal industry work together to find a new way of gauging the work we do that is separate from billable time?If we dont have an answer to this question,the answer will be found for us,and we then have the unfortunate position of struggling to cope
19、with our new identity thrust upon us.1“A new report from the International Bar Association(IBA)has revealed that of 3,000 young lawyers defined as aged 40 and under surveyed around the world,a significant number of them are either leaving or considering leaving their current job in the next five yea
20、rs.Fifty-four per cent of survey respondents reported that they were somewhat likely or highly likely to move to a new workplace,33 per cent wanted to switch to a different area of the legal profession and 20 per cent were thinking about leaving the profession entirely.”https:/www.ibanet.org/New-IBA
21、-report-reveals-significant-numbers-of-young-lawyers-want-to-leave-their-current-job2 https:/ Woodford The time-worn“billable hour”business model has been a mainstay of the legal industry since the Second World War.While this model has been extraordinarily profitable for law firms,it has significant
22、 drawbacks.It shifts uncertainty to the client and thrives when lawyers work at a punishing pace,leading to burnout and an overall lack of well-being.It promotes working harder over working smarter by rewarding lawyers for maximizing hours billed rather than investment in processes and technology th
23、at could help generate the same high-quality work with high costs savings that could be passed on to clients.None of this is new,of course.For years,the legal industry has speculated about the death of the billable hour.Yet it persists because the industry is notoriously slow to change,and clients h
24、ave accepted annual billing rate increases despite complaints about rising costs.There has been no genuine interest on either side of the attorney-client relationship to change the status quo.Although clients desire more excellent value and certainty around their legal spending,until recently,this h
25、as been outweighed by a generalized fear that work quality will suffer in an alternative fee arrangement.On the surface,this concern appears reasonable.After all,lawyers are fee-for-service providers,and clients believe they will get what they pay for.But the opposite dynamic is actually at work.Law
26、 firms that embrace an alternative fee model must produce the highest possible quality because lacklustre work will kill any chance of a long-term client relationship and injure their brand.The billable hour model is also a risk mitigation strategy for law firms.It provides generous,consistent profi
27、ts and shifts the risk of uncertainty to clients.Why would law firms take a risk when clients are happy paying by the hour?But the times,they are a-changin.Founder at Avantech Law7The pandemic demonstrated that technology provides real value to clients.A significant portion of the overhead embedded
28、in the traditional legal model(and passed onto clients through hourly billing rates)is unnecessary.And then came inflation.Costs are increasing at a pace we havent seen in forty years.The pay war for legal talent increased law firms most significant expense by more than 10%almost overnight.Weve reac
29、hed the tipping point where alternative fee arrangements become mainstream.My prediction:The current environment will prove unsustainable for many clients.Weve reached the tipping point where alternative fee arrangements become mainstream.Moreover,to maintain profit margins,law firms will need to in
30、vest in technology that streamlines high-volume,low-impact tasks so that lawyers focus their expensive time on things that move the needle.After all,investments focused on technology that keeps lawyers connected and working from anywhere at any time paid off handsomely as both billable hours and law
31、 firm profits spiked during the pandemic.The lucrative return on further technology investments will pave the way for more disruptive advances in complex document automation and artificial intelligence.The clients and law firms that push for change in billing models and lead technological advances w
32、ill be rewarded for their ingenuity.8Yet,the change process would have to be gradual.At present a relatively small percentage of work is on a fixed fee,(just as the number of electric vehicles is few in number in most cities).But that can change as the data infrastructure is built to allow standards
33、 to be formed,and then from that the meaningful benchmarking of product pricing evolves,and then fixed fees eventually become the norm in the time-based economy.But,lets not kid ourselves:its not going to be an easy ride.The road to a net zero billable hours world is going to be a very long and hard
34、 journey,not the least because as with fossil fuels they work,and they allow a lot of people to make a lot of money.But come to think of it.Making a client pay X(time)for product Y is frankly insane if youve made product Y before.Find the full article on the Artificial Lawyer website:https:/ Tromans
35、Founder of Artificial Lawyer&Tromans ConsultingAccording to Richard Tromans,billing by the hour is like burning fossil fuels,and the battle to move beyond the time-based legal economy is like the struggle to end global warming.Here is why.Billing by the hour is like burning fossil fuelsSelling time
36、is a profitable way to run a legal business,just as burning oil or coal is a tremendously effective way to rapidly generate energy.They are also both very hard to eliminate,largely because even though many people can see the arguments for getting rid of them,moving past our systemic dependency is re
37、ally hard to do.Which doesnt mean it shouldnt happen.9Laura RosseelSenior Associate at CambrianAt first glance,it is evident that the billable hour is not the one and only“right”fee structure for the future,both for clients as well as for lawyers.In my opinion,we should look at a law firm like any o
38、ther business:yes,it should aim to make a profit.But not at all cost,and not at the expense of the core of the legal industry:the people.It is time to create a more sustainable work environment for lawyers and to go back to listening to their clients.So why have law firms not shifted away from the b
39、illable hour?Because lawyers count in“hours”.And old habits die hard.Most alternative fee arrangements are still assessed in light of the time spent on a case file.And if time is the metric,efficiency is the jackpot.Even if ultimately moving away from time-based billing,any efficiency wins realised
40、now will contribute to a more profitable business and a more pleasant workplace.So,it is time to upgrade our“machinery”.A legal services world without billable hours:fairy tale or future?The billable hour has been under severe pressure for a long time now.Some even proclaim it to be dead,but we all
41、know it aint over until the fat lady sings.At present,the billable hour is still at the heart of most law firms business model.But the most innovative players in the industry are steadily and forcefully challenging this status quo.If time is the metric,efficiency is the jackpotThere are countless ar
42、guments against working with billable hours.Invoicing based on billable hours puts the risk of both unpredictability in the scope of work as well as potential inefficiency on the client,instead of the law firm providing the service.It does not differentiate based on the value of the task at hand,the
43、 urgency with which,or the time of day(or night)the task is carried out.Additionally,it is a performance metric for lawyers that favours working more over working better,and the relentless pressure is causing junior and mid-level lawyers to leave their firms for ages.10This is where,in my opinion,te
44、chnology comes in.Legal tech will play a significant role in all repetitive or brainless work.In a value-based world,easy tasks should be cheaper than the time inefficiently spent on them.Many legal tech solutions focus on making a lawyers daily life easier.In addition,law firms would be more comfor
45、table working with fixed fee arrangements or a productized approach,if they would have a better overview of their past casework.The task at hand for legal tech suppliers is to give lawyers smooth access to their data,both in terms of working“faster”by providing efficient access to specific data,as w
46、ell as insights into their broader set of data.Understanding the statistics of the law firms business is a great first step into moving away from the billable black box for clients.Improving productivity and predictability via technology will make it easier for law firms to move to alternative fee a
47、rrangements,which in its turn will have a positive impact on the people that are the core of the people business the legal sector is.Legal tech will play a major roleNonetheless,the white rabbit of legal fee models has not appeared so far.It is clear that there is no“one size fits all”solution in th
48、e legal industry due to the high level of customised work and unpredictability of transactions.A real“death”of the billable hour seems far away the classical billable hour model is easy to grasp and easy to compare versus a fixed(time or value)based fee.Realistically speaking,I believe that the lega
49、l sector will most likely always have a hybrid fee model,offering various arrangements depending on different tasks and the clients preferences.Law firms who are not obsessed with billable hours and create a culture of transparency,efficiency and balance,supported by technology,will win clients as w
50、ell as the war for talent.Time is precious,so lets not waste it.11From a sales perspective,the billable hour is a required metric.Traditional firms often say that they cannot predict how much a particular piece of work will cost,and traditional clients tend to remain silent,not wanting to damage the
51、ir relationship with a firm.In a corporate world,this remains somewhat true still.However,the legal industry and the type of client within the corporate sphere are changing,fuelled even more by the recent pandemic and clients changing work practices and views.I have seen a shift in clients wanting m
52、ore transparency on fees and expecting capped or fixed fees.Traditional law firms immediate thoughts and responses are that they cannot do that because it is difficult to predict how long a matter may take.The level of competition in the legal sector is at an all-time high-traditional firms need to
53、rethink strategies that allow them to provide services and remain competitive.Law firms are for clients,not the other way round.To remain competitive,it is David TurneyCo-Founder and Managing Partner at Avery LawPeople often criticise the billable hour,yet it remains the primary billing method for m
54、ost law firms today.For the lawyers themselves,the billable hour has been blamed for high rates of burnout in the profession,with pressure being put on lawyers to hit demanding billable hour targets.For clients,the billable hour is seen as an outdated and shady form of pricing method often met with
55、resentment once a bill is received.I still,however,dont think that the billable hour is the problem.In my view,the problem is in how the legal industry traditionally uses the billable hour.From a sales perspective,the billable hour is a critical metric.A value is required to be put on our legal serv
56、ices,and there is nothing wrong with that.The key in using the billable hour is in preparing concise and transparent fee proposals from which the client can understand exactly how a firm charges.How can the billable hour be criticised if there is no misunderstanding,breakdown,or disappointment in fe
57、es?Both the client and the firm will be happy.12essential to introduce more client-focused proposals on fees and give clients the comfort of fees from the outset.Firms must invest upfront in the fee proposal process involving speaking with the client and offering guidance(not legal advice)at the beg
58、inning.It is important to ground ourselves as lawyers and remember that clients are not necessarily concerned with how long it will take to draft or negotiate a document,but that they want to get to the end result at a competitive price and have a good experience with the lawyer.The level of competi
59、tion in the legal sector is at an all time highTechnology is helping change this.More and more firms are gathering data to estimate how long a matter will take accurately.The billable hour is yet to be made redundant;the metric is helpful in terms of data and understanding how long certain cases tak
60、e for future fee proposals.As non-traditional law firms are developing,I am seeing more experienced and commercially minded lawyers now comfortably predict how much certain pieces of work will cost a client from the outset.If it takes longer than predicted by the lawyer,then the client should not ha
61、ve to pay additional fees for that mistake.There is an art in providing fee proposals,and the more and more practice and experience a lawyer has,the more transparent the proposal will be.The industry-wide movement towards fixed fees and away from billable hours will not be quick.Traditional law firm
62、s know that using the billable hour works(and in many cases,it does),enabling them to turn in large revenues and cover their overheads.However,the evolution is well on its way in modern firms,which utilise tech and data to develop more client-centric forms of practice and billing for clients.13Steve
63、n OngenaetIs This Time Different?The debate on the future of the billable hour in the legal sector has raged for decades now.Despite being declared dead on numerous occasions,both the billable hour and the debate on its inevitable demise seem in surprisingly great shape.At its core,the problem of th
64、e billable hour,and all time-based billing arrangements for that matter,is the fact that it puts the efficiency risk of the delivery of legal services solely on the client whilst directing all upside to the providers of these services.So,why is it not going away?Is it different this time?Will the po
65、st-pandemic environment put the final nail in its coffin?Or will the current surge in demand for legal services reverse the rise in Alternative Fee Arrangements(“AFAs”)of the last few years?To answer these questions,we first need to understand the difference between time-based AFAs and value-based A
66、FAs.Most of the time-based AFAs resulted primarily from a desire to control costs and still have time or effort at heart.Value-based pricing,on the contrary,seeks to reward law firms for good results achieved,risk reduced,or negative outcomes avoided-independent of the time and effort invested to ac
67、hieve them.To understand the fate of the Billable Hour,we also need to look at the current forces and pervasive long-term trends that shape the commercial dynamics in todays legal market.Despite the current strong demand for legal services,competition is increasing.We witness the gradual but undenia
68、ble arrival of non-traditional players that bring different business models,a better tech toolkit and very different value propositions to the table.The ongoing arms race to“do more with less”hides the“silent explosion of demand”for legal services.But capturing and monetizing this demand becomes Hea
69、d of Service Delivery at NEXL14increasingly complex,particularly for traditional law firms in the mid-market segment.Ever more legal work is shifting in-house,where General Counsel has moved up the value chain and need to deliver much more value with relatively scarce resources(the legal budget on c
70、orporate levels remains marginal).In-house teams are pressured to provide(much)more bang for the buck.They have implemented strategies to reduce their dependence on external counsel,particularly for commoditized low-value/high-volume matters.The focus on efficiency will not be going away any time so
71、on.Despite snubs being challenging to implement,value-based AFAs are much better at aligning objectives and even for“impossible scoping”matters like complex litigation.Vast improvements in data management and analytics,and the emergence of a host of providers,offer large consumers of legal services
72、better tools and advice on how to remove inefficiencies in engaging outside counsel,adding to their negotiating power.Intense scrutinization of the added value and ROI of external legal spent has become institutionalized in large companies.The emergence of“Legal Ops”in corporate legal departments ha
73、s played a prominent role in creating this capability.The combined outcome of these trends seems to herald further erosion of time-based billing practices as the basis for collaboration.Yet we see that most firms stick to the hourly rate as an internal metric to set objectives,measure performance,an
74、d plan the business,despite their increasing pricing and project management capabilities.This tension between the need to externally project an operational model that goes beyond the billable hour and the persistence of internal processes and systems that depend on it is the current state of affairs
75、 in most law firms.And truth be told,for many corporate legal departments,time-based AFAs are primarily sufficient to cope with the prevailing cost pressures.Yet the shift from time-based to value-based billing does seem to be the path forward.As mentioned above,value-based pricing is fundamentally
76、about moving from input-based to outcome-based pricing.It is about perceived value and differentiation.It requires an intimate understanding of the clients business and,above anything else,deep,personal relationships that can inspire the level of trust necessary to make value-based pricing work.At N
77、exl,our mission is to enable lawyers to develop such relationship-based and outcome-driven growth strategies.The distinction between billable and non-billable time and our sectors unhealthy separation between fee and non-fee earners makes no sense in value-based pricing and delivery systems.We need
78、to move beyond the input of“legal excellence”and understand that an outcome-driven approach requires a focus on service delivery,client experience,human capital and technology,all integral to attaining differentiation and competitive advantage.If and when the legal sector manages to embrace value-ba
79、sed billing,the Billable Hour might indeed become an endangered species.But for now,hold those obituaries,as we dont see them disappearing anytime soon.15Eve VlemincxAttorney&Stanford GSB Executive Educator&ConsultantYou dont get paid by the hour,you get paid for the value you bring for that hour.Ji
80、m Rohn.Do you believe the hourly billable will prevail,or do you think we should move towards more“productised”legal services?Or somewhere in between?As with everything,it is all about nuances.I dont think we should abandon the billable hour altogether.In some issues,the billable hour can be an effi
81、cient model,but overall both the traditional business model and the billable hour metric of law firms need some serious reconsideration.The billable hour promotes inefficiency and is somewhat opaque1,while clients ask for transparency on fees.Billable hours and targets form the foundation of the tra
82、ditional law firm business model,but do they still serve the needs of a complex business environment?The billable hour could be one of the metrics to measure performance instead of the target.In the latter case,you cannot underestimate its impact.For decades performance has been measured with one-di
83、mensional scores,such as the billable hour in law firms.The billable hour has a bad reputation when it concerns the lawyers well-being and motivation since people constantly feel the pressure to deliver.The minutes count.Inefficient workers may succeed over their more efficient counterparts.The bill
84、able hour breeds competitiveness while working against the clock to provide stellar results.By relying on the billable hour to assess performance,potentially more valuable metrics are being ignored.What is often underestimated is how measuring performance one-dimensional negatively impacts organisat
85、ional culture.If the billable hour is the primary metric or even target,one operates unavoidable in a transactional culture,promoting acting self-serving.The goal becomes the target itself,which is the opposite of being client-centric.16Innovation will cause firms to move away from the billable hour
86、 as their cornerstone.The traditional business model promotes people working together as a working group instead of a high-performance team.A working group is a group of people working together and sharing information,while everybody remains accountable for the work they produce,without any mutual a
87、ccountability.On the other hand,a high-performance team has a shared vision and goals.There is a large amount of trust,psychological safety and strong mutual accountability.That buzz of motivation and engagement,while everybody is pulling in the same direction.High-performance teams are innovative a
88、nd operate very differently from working groups.2 As a result,innovation will cause firms to move away from the billable hour as their cornerstone.Law firms will have to move to a business model based on the value of services provided,rewarding output(efficiency,value-adding and results)instead of i
89、nput(billable hour),incentivizing processes and norms that optimize the level of costs.With legal technology,routine legal work can be done in a fraction of time yet remain as valuable as ever.The traditional business model with the billable hour at its foundation is based on what used to work for f
90、irms,but does it work for the lawyers and their clients?In a competitive world,it might be time to rethink to stay on top of the game.Work smarter,not harder,nor longer.Innovation comes from people who take joy in their work.”W.Edwards Deming.1 Law firms love affair with the billable hour is fading|
91、Financial Times();https:/ J.R.Karzenback&D.K.Smith,The wisdom of teams,Harvard Business Review Press,1992.17Tobias HeiningBDMC Director Osborne Clarke Germany,ELTA Board MemberIs the billable hourglass running down,or is there still life in the old dog?When answering this question,in general,we iden
92、tify two opposing philosophies:The vultures who are constantly circling over the billable hour,demonising it for ultimately rewarding inefficiency(or,at least,finding pleasure in regularly writing obituaries hoping the supporters of the billable hour would hear their call and that their predictions
93、of the imminent death of the billable hour might come true at last).On the other hand,there are the Grail Keepers and hardcore fans of the billable hour.They consider it the most honest reflection of quality work and high-end performance and would do virtually anything to protect their beloved tradi
94、tion.Of course,there are multiple shades of grey between these two antipodes,and many legal practitioners might even be somewhat agnostic concerning these philosophies and the overall fate of the billable hour.So why not take a closer look at the current situation?Despite many progressive stations p
95、laying the“Requiem for the Billable Hour”non-stop for the last couple of years,it not only is still with us.On the contrary,it remains the predominant fee arrangement in the legal industry.Alive and kicking,some would say-even though it might not be the pure doctrine anymore due to growing budgetary
96、 restraints on the clients side.But is the persistence of the billable hour just another symptom of a change-averse market,or is there more to it than convenience and the inability to break the habit?First of all,the core business model of(most)law firms is still based on selling“time and materials”
97、.Clients readily accept paying for expert time and resources assigned to their specific matters.This generally implies that it is impossible to precisely estimate a projects scope,expecting that requirements will probably change with the case unfolding.And if you are essentially buying time,then tim
98、e units are the critical measure for performance and received benefits for both buyers and the sellers.18The billable hour offers the possibility to flexibly adjust scoping,staffing and handling of projects,and the deployment of external experts.To a certain extent,it also grants cost control for cl
99、ients because they will not pay for more than what they got.That is if accompanied by professional project management,regular status reports or even real-time data,close budgetary supervision by both law firms and their clients,and,last but not least,well-structured feedback processes to create mutu
100、al transparency.The billable hour offers the possibility to flexibly adjust scoping,staffing and handling of projectsFurthermore,the billable hour is still the most reliable way to compare proposals from external counsel and a pretty simple approach to assess complex service performance.Especially s
101、ince alternative fee arrangements,like fixed or capped fees,may lead to excessive lists of assumptions and caveats,making proposals incomparable.So,its not only the law firms who stick to the billable hour.Theres also some ambiguity in clients attitudes and approaches to the concept.In addition,proj
102、ect management and the occurrence and the handling of complications and delays are usually not entirely in the hands of the assigned law firm,making it often very hard to cover potential contingencies with a final yet commercially reasonable proposal.Hence,a fixed or capped fee or other alternative
103、arrangement is not equally suitable for all matters and might even result in inconvenient renegotiations in a running project.So whether you like it or not,it seems as if the billable hour is here to stay.Nonetheless,the general concept is being,and will continue to be,challenged by a couple of deve
104、lopments:The traditional business model of law firms is based on information asymmetry and ultimately an imbalance between the advisors expertise and their clients.Now,with easier access to previously privileged information and data,the original value proposition is being challenged.Hence,clients de
105、mand cost transparency and control,which is not a mere question of“more for less”and cutting costs,but rather an effect of the transformative journey of legal departments worldwide from reactive fire-fighters to proactive risk managers and strategic business partners.This goes hand in hand with clie
106、nts growing(data-driven)understanding of what costs and resources are typically allocated to some instances and projects.This automatically results in the clients expectation that law firms must be prepared to align their interests with those of their clients-which should reflect accordingly in the
107、pricing of projects and matters they claim to have performed many times before.119The new generation of General Counsel is eagerly working on a massive reorganisation of legal departments.Apart from using technology,changes in team structures and ways to communicate and collaborate,they are also tak
108、ing a closer look at service delivery tasks and processes.This also includes using a wide range of approaches and methods for their transformative journey,e.g.flat hierarchies,error culture,empowerment,agile working,Lean,Scrum,Kanban you name it.While these were only isolated cases a few years ago,d
109、riven by particularly innovative individuals,this development and,above all,the need for internal change now seems to have arrived more broadly in corporate legal departments.Companies invest a lot of money and effort to bring their legal departments up to scratch and are pushing for legal workflow
110、standardisation and automation.The further reorganisation of legal departments and their internal working methods will ultimately have corresponding consequences for cooperation with external legal advisors.Once legal departments have adjusted to new(primarily efficiency-driven,business-oriented)way
111、s of working,they will also expect external counsel to structure themselves in the same way.The billable hour doesnt necessarily fit into these workflows and new approaches to service delivery.Once legal departments have adjusted to new ways of working,they will also expect external counsel to struc
112、ture themselves in the same wayThe productisation of legal advisory services is slowly gaining ground,resulting in a higher level of scalability.Hence,we are witnessing a“reverse service transformation”in the legal sector.While services are increasingly seen as a strategic business area in industria
113、l manufacturing and are thus becoming more important,it seems to go the other way round in the legal industry.Law firms and legal departments are looking to extend their value chain by turning their services into productised packages.Furthermore,customers increasingly expect more integrated solution
114、s that focus on strategic challenges rather than buying units of expert time to deal with specific legal issues.This combination leads to a transformation of law firms value chain and cost structure.Law firms that used to focus on sales,planning and execution(with the latter consuming the most signi
115、ficant part of resources and generating the most billable hours)now have to allocate resources to innovation and development of productised services.This is hard to reconcile with the concept of the billable hour since the price of such a product can not be determined by the time spent working on it
116、.The legal market reports indicate that if governed adequately by both sides,alternative fee arrangements can positively affect the overall profitability of projects and matters.The fate of billable hours and alternative fee arrangements will probably result in a continued and peaceful co-existence-even though we might see some shifts in market shares of both pricing approaches.So its perhaps time for the“vultures”and the“Grail Keepers”to bury the war hatchet.3220Im interested to know how you have improved your client delivery en efficiency,using technologyEmail me at dunyahenchman.io