A fair amount has been written since Legal Week published its story on 21 March that ‘Deutsche Bank to refuse to pay for trainees and NQ lawyers after panel overhaul‘, which alleged that the Bank had told its panel firms it would no longer pay for trainee and NQ lawyer time on its files. Some of the commentary around this story has been in favour of the Bank’s position, some has questioned the wisdom of the Bank, and the vast majority of it has sat somewhere in the middle*.
With the level of public legal issues the Bank has had in the past few years, it’s little wonder that the Bank would look to reduce its legal fees, and not paying for trainees’ and NQ Lawyers’ time would certainly go some way to achieving that goal.
That’s all well and good, but to my mind if you are outcome orientated – rather than input driven – then the number of years a person has done something really doesn’t bother you – because what you are really paying for is the result. I mean: who is to know who will have that eureka moment?!?
Sure, it may be more likely to happen to a more experienced lawyer. But isn’t it just as likely that a senior lawyer will have their thinking clouded and the answer comes in the form of a fresh eyes approach from a junior lawyer?
And so enter a voice of reason into the debate – in the form of Vodafone Enterprise global general counsel Kerry Phillip, who is quoted in a later Legal Week article on the issue as saying:
“We do not expect to be charged for training time, but not everything a trainee does is training time. Law firms should absorb the cost of training solicitors, but where there is genuine value added to the client – rather than pure learning through shadowing or watching – then it is fair to charge.”
Absolutely spot on Ms Phillip.
But, crucially, this concept can be extended to all lawyers who act on all matters, in that where you genuinely add value to your client’s business/issue, then charge for it and more often than not you’ll be paid for it (without questioning of the bill).
But, where you don’t add value to your client’s business or issue, you cannot charge for it. Or, more accurately, you can: but increasingly you won’t be paid for it.
And just for the record, Ms Phillip goes on to say in that article:
“That said, we generally agree a fixed price for a piece of work. I expect the law firm to put an appropriately experienced and qualified person on that work, but we are paying for an agreed result or output that the firm puts its name to.”
Again, absolutely spot on:- clients are paying for an agreed result or output that your firm puts its name to – and there is a massive, massive, marketing lesson for private practice law firms to get their heads around in that statement.
* NB: in my experience working tenders, Australia has seen this trend since at least 2010 – if not before.