Get a new model or lose clients

In areas where technology can help clients to help themselves, the billable hour is outdated

Richard Cohen

It does not surprise me that so many clients are unhappy with the cost of getting divorced; couples in this situation are in a highly emotional state and uncertainty around final costs just increases their anxiety.

As last month’s report by the Legal Ombudsman points out, the withdrawal of legal aid, with up to 200,000 couples having to fund their divorces themselves, will create even further dissatisfaction.

The question is, what can family lawyers do to cut costs and give clients more certainty around what the total costs of getting divorced will be? And how can they do this without reducing the quality of the service they deliver?

One approach is to ‘unbundle’ the divorce service. This is where the litigant handles their divorce themselves, but with support from lawyers online and on the phone. These lawyers provide them with tools such as document and form automation as well as legal advice, assistance and document review, essentially on a ‘self-help, but assisted’ basis.

The object would be for the client to buy in the pieces of legal work or advice they need when they need it, and cut out the hourly rate and the current fully retained basis of instructions to lawyers. Much work is being done in this area in the US, with the American Bar Association passing Resolution 108 on the use of unbundled services, encouraging practitioners to consider limiting their scope.

However, there is little work on unbundling going on in the UK. It should be more vigorously promoted by the Ministry of Justice, the SRA and the Law Society.

Harnessing the capability of technology lawyers can significantly cut the costs to clients. This is particularly true of services such as divorce that are heavily document- and forms-based and where it is possible – and often desirable – for clients to fill in the forms themselves. By getting clients to participate in the process in this way, lawyers are freed up to focus on advising their clients and will not waste their time form-filling or photocopying. It also allows them to provide fixed-fee prices on these components of the process.

So why are lawyers not adopting technology in this way? Because firms are clinging on to the billable hour, neatly packaged into six-minute segments. The structure and culture of most firms militates against a move away from the billable hour or the use of IT to deliver cost advantages that can be passed onto clients. After all, where is the incentive if you can get a client to pay you £200 per hour?

The legal profession is the last bastion of resistance to any form of self-service, with just about every other industry – such as banking, insurance, travel and music – having moved this way. Something is going to give very soon, and not before time because low-to-moderate income clients simply cannot afford the billable hour, will not pay for it and do not want it.

It is time for firms to wake up and smell the coffee before others move into their space and provide what clients really want.