QUERETARO, Mexico–LAWFUEL -The Legal Newswire – The prevailing system used by law firms to charge for legal work has long been considered the scourge of the legal profession. The practice of billing clients by the hour has been roundly criticized, both by clients, who see it as a conflict of interest, and lawyers. Yet despite nearly uniform disdain for the practice, few international law firms have voluntarily abandoned it.
Now a prominent Mexican law firm has announced it has discarded hourly billing in favor of alternate billing methods that better meet the needs of their clients. May, Cruz Consultores, a boutique international corporate, real estate and environmental firm catering to multinational clients, has virtually eliminated the concept of billing clients for time worked.
“We will use hourly billing only in very special circumstances in which it really benefits the client, or when the client insists,” said managing partner Robert R. May. “But we will first offer clients other options.”
Struck Gold
“I feel like I’ve struck gold with May Cruz,” said Steven M. Bradford, vice president and regional general counsel for the Americas for British chemical conglomerate Imperial Chemical Industries PLC (ICI). “Over the years we have used a variety of counsel in Mexico — large and small law firms. I struggled to find a firm with whom I had full confidence.”
“May Cruz provides excellent value and expert targeted legal service,” Bradford said. “Their new billing system simply shows me once again that their primary concern is for the wellbeing of the client.”
“For some time we have had a fixed retainer with the firm,” continued Bradford, “but recently we have had some extraordinary M&A and joint venture work that would normally have been charged separately. We were quite pleased when they made us a rather innovative proposal to enable those more complicated and time-consuming matters to be included in our standard retainer at no additional cost to us.”
According to May, the ICI flurry in 2007 of complex legal work on a variety of matters, including the more than €11 billion (US$16.7 billion) sale of the company to Akzo Nobel, demonstrated to the firm´s partners that they could offer alternatives to hourly billing for virtually all matters while preserving its high-quality service. “The increased activity with ICI this year gave us the opportunity to be creative and give the client an attractive alternative that ensured the work was properly handled without undue expense,” May said.
“We know that May Cruz is concerned about all of our needs and long-term interests, including managing the costs of our legal services, and that´s what ICI looks for in its service providers,” said Bradford. “We want experience and excellent service at a reasonable price. By using alternatives to hourly billing, we get the level of service we need and don´t have to worry about unpleasant surprises when the bill comes.”
According to May, the elimination of hourly billing came as the result of the firm´s desire to innovate and provide added value to its services. “We have never gotten a complaint about our billing, but we believe the future of legal services will be based on fair-value billing instead of charging for time. Our firm prides itself on its leadership in providing value for our clients, and implementing a fairer billing system is just part of that continuing effort.”
