IMD Solicitors to scrap billable hour in favour of outcome-based pricing

A north-west law firm is preparing to drop the billable hour entirely, becoming one of the first traditional practice-style firms to move to an output-based charging model.

Marcin Durlak, managing partner of IMD Solicitors, said the firm is now in the final stages of implementing a new system that prices work by result and value rather than by the time spent producing it. The change follows the firm's earlier move to a four-day working week and is being framed as a cultural and commercial shift rather than a simple pricing tweak.

Why IMD is moving away from hourly billing

The legal profession has debated the future of the billable hour for decades. Critics argue it rewards inefficiency, creates perverse incentives for junior lawyers, and leaves clients paying for process rather than outcomes. Defenders say it is transparent, predictable and the only practical way to price complex, uncertain work.

Durlak's argument is straightforward: technology and artificial intelligence are allowing some legal tasks to be completed far more quickly than before, and charging by the hour therefore undervalues efficiency.

"A client doesn't really care whether something took a lawyer ten hours or two," he said. "They care about the problem being solved, the outcome achieved, the certainty they receive and ultimately the value delivered."

That is not a new sentiment, but it is unusual to hear it from a conventional firm rather than a platform or new-model practice.

How the new model will work

IMD is not simply replacing hourly rates with fixed fees. Clients will be offered three service options that differ in scope, pace, access and the level of senior involvement. The idea is to give clients genuine choice rather than forcing every matter into a single pricing structure.

Durlak rejected the suggestion that moving away from the billable hour would automatically reduce fees. "If technology allows a lawyer to produce an excellent outcome in significantly less time, why should greater efficiency result in a lower fee simply because fewer hours were recorded?" he said. "Clients are ultimately buying our expertise, judgement and the outcomes we help them achieve — not units of time."

That framing will be closely watched by other firms considering similar moves. The fear among many partners is that alternative fee arrangements inevitably compress margins. IMD is betting that clients will pay for certainty and value if the proposition is presented clearly.

The platform firms have already made the move

Several newer law firm models have already abandoned time-based billing. Gunnercooke removed time recording and billable hours for its lawyers. Keystone has adopted a similar approach. Setfords says it sets no billing targets for fee-earners, arguing that this freedom lets lawyers focus on quality rather than quantity.

These firms operate on platform or fee-sharing models that give them more flexibility than traditional partnerships. What makes the IMD announcement interesting is that it is a more conventional firm attempting to make the same transition without changing its underlying ownership structure.

What this says about AI and legal pricing

The timing is significant. As generative AI tools become embedded in legal workflows, the gap between time spent and value delivered will widen for certain types of work. Firms that continue to bill by the hour may find themselves charging clients for work that took minutes rather than hours, or watching platform competitors undercut them on price.

That does not mean the billable hour is finished. Complex litigation, advisory work and matters where the scope is genuinely uncertain may still be better suited to time-based billing. But the assumption that hourly rates are the default for everything is being challenged more directly than at any point in the past decade.

Our view

IMD deserves credit for treating this as a cultural change, not just a pricing change. Moving to outcome-based billing requires firms to define value clearly, scope work tightly, and have honest conversations with clients about what they are paying for. It also requires internal confidence that lawyers will not game a new system in the same way some game the old one.

The real test will be whether clients accept the new model and whether the firm can maintain profitability without the safety net of hourly billing. If it works, it may encourage other mid-sized firms to follow. If it struggles, it will be cited as evidence that the billable hour survives because it is hard to beat.