London, England — Clients are increasingly frustrated with traditional invoicing methods used by law firms, calling for a shift away from the billable hour during recent conversations captured in an In-House Lawyer Survey. Many clients argue that more modern, fixed-fee models would enhance transparency and efficiency.
An energy sector attorney expressed strong sentiments about the need for change. “There’s no reason to run a stopwatch, everyone hates it. If firms have decades of digitized data, they could establish fixed fees with a modest markup instantaneously,” the lawyer noted. The sentiment underscores a growing desire for firms to adapt to modern expectations surrounding billing.
Respondents to the survey indicated that the integration of artificial intelligence could open doors for more predictable pricing. An in-house lawyer in technology, media, and telecommunications suggested that employing AI could streamline fee structures, asserting, “It’s becoming painfully clear that the billable hour primarily benefits law firms and not their clients.”
General counsels (GCs) from various sectors shared similar frustrations. One remarked, “It’s appalling that I still need to request a fee cap for M&A work in 2025,” stressing that alternative fee arrangements should be standard practice for commoditized services. Another lawyer described the billable hour as outdated, claiming it incentivizes inefficiency, where extended work leads to more charges rather than better results.
Illustrating this point, a lawyer in the manufacturing sector compared inflated billing to a dentist performing unnecessary work. Concerns about inflated timesheets also emerged, with a financial services attorney expressing distrust in firms’ current billing methods.
A GC in the energy sector directly called for the abolition of hourly billing rates, advocating for a shift toward more business-like profit calculations. Clients indicated a desire not only for fairness but also for better value in legal services. A private equity GC pointed out a particular U.S. firm that provided valuable advice but at a prohibitively high cost.
Conversely, some respondents critiqued firms that may offer lower hourly fees but extend the timeline considerably, ultimately resulting in greater expense. Notably, experiences varied widely, with clients praising firms that offered both reasonable rates and effective service. The general counsel from a funds organization commended Ashurst for being both practical and cost-effective.
While some were willing to invest in higher-priced firms deemed worth the cost, others highlighted the necessity for firms to adhere strictly to budgets and deadlines. A technology GC emphasized the importance of law firms sticking to agreed-upon parameters, mentioning the complications that arise when estimates are exceeded.
Furthermore, the need for consistent billing and clear communication about fee structures was emphasized. A real estate sector in-house lawyer stated, “It’s crucial that firms are upfront about fees from the start,” pointing out that unexpected costs can complicate internal budgeting processes.
With the survey still open for additional feedback, clients are encouraged to voice their perspectives on the evolving landscape of legal billing practices.
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