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Bloomsburry Family law

Legal services

On the clock

Is time up for the billable hour? David Coldrick considers whether time recording is a viable charging structure for law firms. In last month’s column I set out my reservations about time recording as the basis for billing clients. I suggested that it does not really work for the law firm, it does not work for the client, and it will not stand up to the challenge of alternative charging methodologies spurred into existence by increased competition. This month I take a look at the background to the billable hour and some of the arguments used to defend it.

From Russia with love

As lawyers we are now anticipating a move towards a regulatory structure somewhat akin to that provided by the FSA for financial advisers – a so-called ‘principles-based’ system. For those of us who once hoped this might represent a return to past simplicities, I think we shall be disillusioned; a quick look at FSA rules is instructive. And of course, given recent events we might be forgiven for thinking deeply about the efficacy of such systems.

Due care and attention

The coalition Welsh assembly government stated in its “One Wales” programme that during its term it would bring forward legislation to create a more level playing field in relation to charges for domiciliary care services. It has fulfilled that commitment in passing the Social Care Charges (Wales) Measure 2010, which received Royal Assent on 17 March 2010. In Wales, this measure will replace the Westminster-enacted Health and Social Services and Social Security Adjudications Act 1983, which gave local authorities the power to recover such charges they considered reasonable from recipients of non-residential social care services.

Time travel for lawyers - Coldrick's comments

The introduction of ABS is a mega change. It will affect everyone. It does not just apply to every other solicitor or every other law firm. It applies to the vast bulk of the private client market as much as to the mainstream personal injury and other “commoditised” markets, which we have already seen eroded by third-party market entrants. If there is perceived to be a decent profit margin within the law, as there is, then there will be increased competition until the market stabilises. That is basic economics. It is how the real world of business works. It is not how the legal services market has operated up until now. It is presently impossible for outsiders to make money from “proper” law firms doing the stuff proper law firms do.