Legal Billing System 'unfair'
by David Vilensky
Amanda Banks, The West Australian, February 2012
Lawyers need to step into the commercial world and stop believing they can bill however they want and get paid under a fee system which is inherently unfair, according to the head of a Perth firm.
Lawyer David Vilensky, whose firm abandoned time billing in favour of a fixed-fee model two years ago, also believes the traditional fee system used by most lawyers - which is based on charging for six-minute lots of work - is exploiting big business.
Mr Vilensky, who has practised in WA for 25 years, outlines his case against time billing in the latest edition of the Law Society of WA magazine Brief, published this week.
His medium-sized firm, which employs 14 lawyers among a total of 25 staff, provides advice and representation in the areas of family, corporate and resources law.
Mr Vilensky said getting rid of the "deadweight" of time billing had increased his firm's profitability and was significantly less stressful for staff.
He said fixed fees were also a fairer system that provided clients with certainty and improved efficiency.
In the article in Brief, Mr Vilensky acknowledged that his increasing concerns about time billing had been captured by Supreme Court Chief Justice Wayne Martin in a speech delivered to the Perth Press Club nearly two years ago.
Justice Martin, who warned that the system could result in clients being charged for the time lawyers spent thinking about their case in the shower, called on the profession to shift away from the system.
Justice Martin highlighted that the time billing system involved an inherent conflict between the interests of the client - who wants an expeditious outcome - and the interests of the lawyer to bill more time.
Mr Vilensky said while smaller businesses and individuals were more likely to complain about issues with time billing, big corporations were being exploited by the system and were unlikely to question charges.
He said he was not suggesting lawyers were unethical, but the time billing system was open to being "milked" and it was not uncommon for firms to charge fees of $600 an hour.
But he said the biggest problem with time billing was the enormous pressure it placed on law graduates, which had led to some leaving the profession.
Mr Vilensky's firm abandoned time billing two months after Justice Martin's speech and adopted an alternative fixed price system which includes different schedules for various stages of the legal process and accounts for varying complexities in clients' cases.