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Legal industry ‘cancer’ kills innovation

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Peter Godfrey | 31 Mar 2014, 08:02 a.m. Agree 0
Firms must fight the 'cancer' of time-based pricing if they are genuine about innovating and being different, according to a leading consultant
  • Phil Patterson | 01 Apr 2014, 09:28 a.m. Agree 0
    The reason why law firms continue to charge by the hour is vested interest. Why commit to '$14,200+gst' when you can say 'it will be around $14,000'. When the invoice arrives, it has turned into a shocker of $22,800+disbursements+gst. Guess whose interest it is to remain time-based?
  • David Gibbs | 04 Apr 2014, 11:17 a.m. Agree 0
    The problem with fixing a fee in advance is that there will inevitably be conflict between what the client expects for that fee and what the lawyer considers that it covers. For any transaction there will unknowns at the outset. We see this all the time in fixed price contracts for any services. In giving advice in a complex commercial matter for instance it is unrealistic to be able to envisage at the outset all that will likely be required to be covered. Do we therefore include a contingency sum? Then how competitive will the "quote" be? If there is an honest approach by the lawyer and the trust and respect of the client at least the time based fee represents the actual value of the matter billed. I guess it takes time to build up that trust and respect, and it is easy to lose this if abused. We are moving too far away from being a profession and just being businessmen providing a service. We are the poorer for it.
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