The best conversations I have with law firms tend to have little to do with technology, as there are more fundamental things that need discussion first.

Technology can be a great enabler, but only if it aligns with the law firm's business model, and how the firm creates and captures value.

That’s why I'm always keen to understand what a firm does and how it charges for its services. If they are still charging by the hour, it will make little sense for them to invest in the type of solutions we specialise in delivering, which aim to remove as many hours of time from the job as possible.

If the firm's costs (mainly premises and staff) are largely fixed and they don't have a marketing strategy to get more clients for their distinctive solutions, there's a high chance with an hourly rate billing model that they could end up doing the same amount of work, for the same clients, faster and for less money! Why would the firm want or pay for automation?

Our ideal law firm client understands the importance of designing a distinctive solution that maximises the value for their clients and themselves. Knowing they can deliver the outcomes their clients need more efficiently, effectively and profitably than their competitors, they want to market their capabilities widely and to draw more clients to their website, where they can start the process of working with the firm and give the firm the information it needs to provide its service.

The more the firm can optimise its service, the greater the value the client can receive and the more fees the firm can capture.

A firm like this knows it can support many more clients on a very profitable basis, and it is really motivated to grow its business without adding many extra people or burning out the ones it has. In that context, it can see how technology will enable its strategy and the other changes it wants to make.

With the emergence of Generative AI, I've noticed that more firms are starting to realise that hourly billing is no longer their friend. I hope this only grows. Hourly billing is not good for clients or lawyers. It incentivises the wrong behaviour.

The more firms understand where they want to go, the easier it is to see how technology can assist and which technology options are most suitable.

If you are interested in value billing and how it could apply to your firm, keep an eye out for my next post where I’ll share some resources that I hope will help