'Time to move away from hourly billing and run cases like projects'

A new funding landscape, success fees - and insurance premiums, in most cases - no longer recoverable, damages-based agreements now available in civil cases, referral fees banned in most personal injury cases, and clients now with a financial stake in the funding of their claims: the litigation world post-Jackson is going to be a different place, District Judge Monty Trent told delegates at the SJ Live conference on Wednesday (22 May 2013).

"Free ride has gone and, correspondingly, lawyers are coming under increased pressure to give value to obtain work," he said, asking lawyers to consider whether hourly billing should remain the norm.

"Is it time to suggest the unthinkable and move away from hourly billing to fixed-cost pricing?

"Lord Neuberger thinks it might be. In his address to costs lawyers last year, he said hourly billing focused on the cost of time without reflecting the value of the work, that it confused cost with value: 'Any business which bases its charges simply on costs does not deserve to succeed, or even, some might say, to survive'.

"You wouldn't enter into a building contract on the basis of hourly billing. We now have opportunities, particularly with budgeting, to move to fixed price. It might even be to the benefit of lawyers, particularly diligent ones who can resolve disputes at an early stage within an agreed budget with the client, or a DBA, and then pick up their costs quickly without having to wait two or three years. You can no longer buy cases, you've got to earn them.

"Under a CFA, it doesn't matter how much the job costs because you don't have to pay anything. Now you're going to have to pay with your own money clients are going to be much more savvy about the type of arrangement they go for.

"So what sort of models could we consider for litigation? Fixed prices is one - either individual sets of work or types of work (fast track v multi track, for instance). But more likely you can have fixed price for each stage of the case, rather like and architect for the design, build and management of a project - with optional extras, for instance if you want senior counsel. There could also be a separate menu for contingencies, such as appeals, experts, and for bulk litigation for large clients."

"New retainer models such as DBAs, should also work more efficiently now that we have costs budgeting.

"We could also look at more careful project management. The move towards costs budgeting means that you will have to plan cases strategically rather than try one thing and see what happens. Proportionality will also mean that you will need to focus on what you are trying to achieve.

"Next, work behind your desk, not at the court. It's a total waste of time to sit behind counsel at court when you could be doing so much work at your desk; obviously there are circumstances where you would need to be at court, but with telephone hearings and the ability to find counsel for a third of the price which you would charge as a partner, there is no reason to be in court. So, be at your desk unless you want to do advocacy full time - I'm talking about if you want to do fee earning to make a profit, not as a hobby.

"I also believe not enough use is made of checklists. We should be like pilots. You wouldn't dream of getting on a plane where the pilot hasn't been through a checklist and ticked every single item he needs to tick before pressing the starter button. When you have so many things to remember - in particular with Part 36 and time limits - there are things you may know but that your staff may not know. This is project management, it's got to run like clockwork, with regular budget reviews - get a shadow fee earner to keep an eye on your cases.

"One main change should be to drive by issues, not by process. It shouldn't be about just one thing after another, mechanically; focus on the issues and what you are trying to achieve. Process-driven litigation has got to be a thing of the past. If necessary, cut out any issues that may not be proportionate.

"Now, this may sound shocking, but: employ smarter staff. I'm sorry to say the quality of a lot of the litigation I am seeing, particularly in small claims, is deplorable. One gets the impression that there's a lot of staff there who really haven't a clue, who make the most appalling mistakes and can't seem to understand the consequences of what they're doing.

"And wolf packs have to go. Teams of 5, 10, 15 lawyers, throwing emails around between themselves and other lawyers; they have got to go. They're not going to be allowed on grounds of proportionality. I have nothing against teams but they should be used more efficiently. Watch a Formula 1 racing team changing tyres; there are about 16 people running around, but each one has one specific task and one task only, and it's all choreographed so that it's all played exactly in the right way. They rush in, rush out, and in less than a minute the car has new tyres. Set up a team where you can identify the work with this degree of efficiency - rather than different people doing the same job three or four times. If there is a detailed description of who has done the work etc, judges will be prepared to agree the costs, but if there is any evidence of duplication in the costs schedule, I'm going to be less sympathetic.

"Now, some dirty words: ADR. Alternative dispute resolution is going to come to the fore. It will no longer stand for 'alarming drop in revenue'. It's going to be of real benefit to you. If you're on a DBA you want to settle your case quickly with the least possible effort. Consider early neutral evaluation by a judge to try and resolve a sticky issue early and quickly. Remember ADR doesn't mean mediation: ADR starts with negotiation. Early settlement is going to be the new timetable - we're seeing 98 per cent settle, and nearly all on the very last day when everybody has done the work [and incurred the costs]. There's no benefit to that if you're on a DBA - early negotiation is going to be very important and you will be driven into it. The earlier you settle, the more likely you are to have a contented client but also a contented accountant.

"I also think that Part 36 will be a fundamental tool in every litigator's armoury. I suspect that it's not at the moment. I am amazed at the number of cases, highly fought on quantum, where there hasn't been a part 36 offer. Part 36 will be as strong a tool in your armoury as any other form of negotiation."