Why is Justice so Unaffordable?

Accessing legal services in Australia has long been regarded as very costly, time-consuming and plainly 'impossible'. Quite frankly, the cost of accessing legal advice is beyond many; a matter that was highlighted by the former Commonwealth Attorney General in 2012:

"Unless you are a millionaire or a pauper, the cost of going to court to protect your rights is beyond you." ~ George Brandis.

The Attorney General's point is quite clear. Unless you are a 'millionaire' that can afford to hire legal counsel to represent you or a 'pauper' eligible for publicly-funded legal representation from organisations such as Legal Aid, accessing legal services is beyond your reach. 

This is problematic for a justice system that prides itself on upholding the rule of law. If the law truly applies to all so that no one is 'above the law', a key part of this is to make the law readily known and accessible to all Australian citizens irrespective of their social or economic background. Unfortunately our legal system is the antithesis of this: Unaffordable, time-consuming and inaccessible. 

This has left everyone scratching their heads, asking, Where has the justice system gone wrong?


Although this is quite a multi-faceted question with many answers, perhaps the most significant consideration is in relation to how clients are charged. This shall be the focus of this post.

Surprisingly, time-based billing still remains standard practice in Australia with lawyers charging for work on an hourly basis. And what can we say about time-based billing?

Time-based billing is a recipe for inefficiency. 

Charging on an hourly basis incentivises legal practitioners to create more work for the sake of creating more pay, thereby creating inefficiency, unethical behaviour and ultimately more grief for the client. To put things in the words of the former Chief Justice of the NSW Supreme Court, James Spigelman: 

"[I]t is difficult to justify a system in which inefficiency is rewarded with higher remuneration ... [because] the legal practitioner does not have a financial incentive to do the service as quickly as possible." ~ James Spigelman

In addition to inducing inefficiency, time-based billing does not guarantee quality legal services. Rather, numerous studies have documented that long hours generally can backfire because they can induce burn-out and stress amongst employees, thereby contributing to poorer quality work that is riddled with errors. 

Contrast this to alternative fee arrangements such as piecework arrangements, where the cost of the legal work is fixed or an upper limit is agreed upon. This compels legal practitioners to finish the work as soon as possible so they can maximise the work done whilst minimising their hours. Moreover, project-based fee models where fees are measured by outcomes for the client rather than time also encourage legal practitioners to be more focused and client-centric with the services they provide. 

Now that I've mentioned alternative fee arrangements ... 

Is there hope for the future?

The presence of alternative fee arrangements offers some promising news. If there are alternative fee structures that can offer more efficient legal services with lower costs, perhaps these might start to sweep through the market and replace time-based billing. All of this offers the promise of legal services becoming more accessible and affordable for all. 

Now, some might argue that alternative fee structures will not succeed as much because time-based billing is 'common sense' in that it is a way for law firms maximise their profits. Arguably, this is the prevailing attitude of large commercial firms seeking to maintain a competitive position in the legal landscape by generating higher fees. However, what this argument ignores is that by resorting to alternative fee arrangements that promise certainty with legal costs, law firms are able to tap into other markets that previously were inaccessible. In fact, project-based fee models have proven themselves to be more popular with 'smaller' clients such as start-ups and technology firms that cannot afford to have excessive legal costs. 

Even so, customers that traditionally sought legal services through firms adhering to time-based billing may soon realise that they can also reduce their legal costs by hiring law firms with alternative fee structures. In these troubling economic times, larger businesses will also be seeking to cut costs in some way, shape or form. If legal costs are typically expensive, then why not seek to reduce them as much as possible? 

This being said, time-based billing is still the dominant paradigm within law firms. Or, as Richard Susskind puts it:

"In truth, hourly billing is not simply a way of pricing and billing legal work; it is a mindset and a way of life." ~ Richard Susskind.

Changing this mindset will be difficult. This is not to say it is impossible, however, it will require significant commercial pressure from consumers and competitive pressure from newer firms for 'traditional' law firms charging on an hourly basis to change their practices. 

Final thoughts

The rise of alternative fee structures is an opportunity for the cost of legal services to be significantly lowered. While this may not replace hourly-based billing in an immediate sense, I believe that alternative fee structures will only become more attractive as customers (large and small) seek to cut legal costs. 

Now, I must say that this still doesn't answer the question of the 'individual' needing access to justice. However, if alternative fee structures are lucrative to customers that happen to be larger businesses or even smaller enterprises, perhaps we might see these structures filter down to legal services provided on the individual level.

And let us hope so!!

References

[1] Law Council of Australia, 'Rule of Law' (online, 2020) <https://www.lawcouncil.asn.au/policy-agenda/international-law/rule-of-law>.
[2] Christine Parker and Adrian Evans, Inside Lawyers' Ethics (Cambridge University Press, 3rd ed, 2018).
[3] Anam Ahmed, 'Overworked Employees & the Quality of Work', Chron (online, 5 October 2020) <https://work.chron.com/overworked-employees-quality-work-22958.html>.
[4] Sam McKeith, 'The Slow Demise of Billable Hours', Law Society of NSW Journal (online, 11 November 2019) <https://lsj.com.au/articles/the-slow-demise-of-billable-hours/>.
[5] Zachariah Schafferius, 'Ethical Issues Posed by Time-Based Billing in Law Firms', Justice and the Law Society (online, 21 April 2016) <http://www.jatl.org/blog/2016/4/20/ethical-issues-posed-by-time-based-billing-in-law-firms>.
[6] Richard Susskind, Tomorrow's Lawyers: An Introduction to Your Future (Oxford University Press, 2nd ed, 2017).