Transcript of Beyond Billable episode with Dick van Lankeren Matthes, founder of Shift Upgrade

This is a transcript of my conversation with Dick van Lankeren Matthes for the Beyond Billable podcast. Find the whole conversation here: https://lnk.bio/PimBetist

Pim:

Welcome to Beyond Billable: Lessons from Lexpo. My name is Pim Betist, founder of Clay Richard Legal AI Consultants.

Broadcasting from Lexpo, the legal innovation event, we’re diving into the future of the legal sector.

In this special series, you’ll hear directly from the experts and visionaries at Lexpo on how to future-proof your firm. Expect practical ideas and honest conversations about the impact of AI on your legal department or practice. In this episode, I sit down with Dick van Lankeren Matthes, founder of Shift Upgrade. With years of experience as a finance lawyer, including as Head of the Transaction Innovation team at Loyens & Loeff, Dick knows the legal world inside out and he’s on a mission to change it.

We discuss why he left big law after 18 years to help firms and legal departments do things differently. His focus: making sure highly trained lawyers spend less time on low-value work and more time on what truly matters.

We explore the core elements of meaningful change: people, process, and technology, but also the biggest obstacle to real innovation in the legal sector: the billable hour. Dick explains why this outdated model kills the incentive to improve and makes a compelling case for fixed or project-based fees.

It’s a conversation packed with practical insights on pricing strategy and change management, delivered with Dick’s signature pragmatism.

Whether you're in a law firm or a legal department, expect plenty of food for thought on how to deliver better legal services at lower cost and with higher quality. I hope you enjoy this candid and thought-provoking conversation with Dick van Lankeren Matthes.

Pim: Welcome, Dick.

Dick: Thank you.

Pim: You’re the founder of Shift Upgrade. What do you do?

Dick: We help law firms and legal departments perform better.

Pim: Perform better?

Dick: Yes. We work on the combination of people, process, and tech. When those three align, you get smoother delivery at lower cost, with greater efficiency, effectiveness, and quality. That’s our focus—we help legal teams do what they already do, just a bit better.

Pim: And your own background? Can you give a brief overview?

Dick: I’m a finance lawyer by training. I worked at Loyens & Loeff, a large international law firm with offices across Europe. I held several roles there, but my last one was Head of the Transaction Innovation Team. Our mission was to rethink how we practiced law, aiming for better ways to work.

Pim: And then?

Dick: After 18 years in big law, I figured it was time to move out. Just like I left my parents’ house when I turned 18, I decided to leave the law firm life and do something different. What I do now is essentially the same as before—but for a broader group of clients and with a wider perspective. I help law firms and legal departments using the expertise I built over those 18 years.

Pim: So you wanted to do things differently?

Dick: That’s been a constant for me. I like challenging the status quo.

Pim: What was the main thing that needed to change?

Dick: I loved being a finance lawyer—but I didn’t love everything about it. We spent countless hours doing low-value work. In the early days, I’d be up all night fixing brackets in contracts. It was mind-numbing. And I kept wondering, why are we hiring smart people to do dumb work? That’s what I wanted to change.

Pim: And how do you help law firms make that shift—so lawyers can focus on the interesting work?

Dick: Because I was at Loyens & Loeff for so long, I’ve seen how to drive change even in highly traditional environments. It’s tough. Telling successful lawyers—people with fancy cars and home cinemas—that they should change is a hard sell. But I managed. And I realized I love doing that. So now, I bring that experience to other firms and legal departments.

Pim: What kind of challenges do they face?

Dick: Most of them want change. But they struggle with how. At conferences, I see the same story—everyone knows something needs to shift, but they’re stuck. What we do is sit down with them and dig into the core problems before offering solutions.

Pim: Can you give an example?

Dick: Sure. Change comes down to three pillars: people, process, and tech. Law firms often fixate on tech. It’s shiny and exciting. Someone sees a flashy demo and says, “I want that.” But they skip the rest—and that’s where things go wrong. Plugging in a tool without aligning people and process doesn’t work. You need a holistic approach.

Pim: Including strategy?

Dick: Exactly. Pricing is a good example. If you don’t fix your pricing model, you disincentivize everything else. CFOs just want lower costs. Legal departments are short-staffed. External counsel is expensive. Law firms feel the same squeeze—more regulation, more complexity, more client demands. Everyone wants more for less.

Pim: And younger lawyers aren’t willing to work 80-hour weeks anymore.

Dick: Right. They want meaningful work, not late nights and mindless tasks. If you ask them to stay until morning to finish a report, they’ll say, “No thanks.” And honestly, I support that. Firms need to adapt. So you’ve got this double challenge: more pressure, and a different kind of workforce.

Pim: So, there’s room for improvement everywhere.

Dick: Absolutely.

Pim: If you had to give a top three for legal departments and law firms—what should they focus on to improve?

Dick: First, focus on the problem. Forget fancy tools. Really define the problem—and make sure the whole team aligns around it. That’s a key principle of design thinking, which the legal world is only starting to embrace.

Pim: So everyone needs to experience the problem—not just agree to it.Dick: Exactly. Without alignment, a solution won’t stick.

Pim: And number two?

Dick: Law firms must change their pricing strategy. If you’re stuck on the billable hour, there’s no incentive to improve.

Pim: Zero incentive.

Dick: In the short term, yes. Long term, the world is changing—and if you don’t change with it, you’ll fall behind. It’s like climate change. Ignoring it doesn’t mean it’s not happening.

Pim: So don’t wait 30 years.

Dick: Exactly. I’d say we passed the tipping point in 2015. Change takes time. Especially in large firms, it’s like steering a tanker. You can’t just flip a switch.

Pim: And your third piece of advice?

Dick: Honestly, those are the two big ones: start with the problem, and change your strategy. I don’t have five. I’d rather give you two that matter.

Pim: I get a very pragmatic vibe from you. Is that fair?

Dick: Very fair.

Pim: How does that show in your work?

Dick: I always ask, “What does this mean in practice?” Lawyers love the intellectual side—debating case law, parsing regulations. But often, you spend an hour discussing legal theory and then realize all it means is changing a clause or shifting your approach slightly. Let’s talk about that. Let’s move the needle. Because if you stay stuck in legal fluff, nothing happens.

Pim: So it’s about cutting through the theory to get something real done.

Dick: Exactly. Maybe it’s a habit from my time in practice. I’d always say, “Okay, what needs to happen now?” Theory is nice—but it doesn’t move things forward.

Pim: Maybe it's something you carried with you from your time as a lawyer—this constant urge to ask, “Okay, but what really needs to be done?”

Dick: Yes. The academic angle is interesting, sure, but I always want to see the practical purpose of a discussion.

Pim: Can I ask you to apply that pragmatic lens to the issue of pricing? Let’s keep it simple—how should law firms price their work?

Dick: I’ve always found the billable hour strange. From the very first day—over 18 years ago—I didn’t understand it. I remember being asked to write down my time and thinking, How does this even relate to the value I just delivered? In the beginning, you’re not that good yet, so things take longer. Sometimes you make mistakes, waste time. And I’d wonder, “Shouldn’t I log less?” But the answer was always no: Just write what you did. So essentially, clients were paying for my inexperience.

Pim: And if you were faster, they paid less?

Dick: Exactly. My boss would be happy if I was slow, because it meant higher billing. I always found that upside-down. You’d never pay a house painter by the hour. You’d say, “This is the house—what will it cost?” Whether it takes a week or six, that’s their problem. Just get it done. And if they can do it faster at the same quality, even better.

Pim: So why would we accept this model from lawyers but not house painters?Dick: That’s exactly it. It doesn’t lead to better quality. If anything, it disincentivizes efficiency. It’s outdated. I’ve never been able to rationally defend it. So I’ve always tried to steer clients and firms away from it.

Pim: Is fixed fee your go-to alternative?

Dick: Yes. It’s the most straightforward option—and it’s become more widely accepted. When I first introduced it, there was resistance from both clients and partners. But if you think it through, fixed fees make the most sense for everyone. Project-based fees, tiered fees—those are all just minor deviations. Fixed fees offer clarity and align interests.

Pim: What are the downsides from a client’s perspective?

Dick: If the work turns out to be a lot lighter than expected, they don’t get the upside. But personally, if I were a client, I’d still go fixed every time.

Pim: And what if a law firm takes shortcuts or compromises on quality because they’re not billing by the hour?

Dick: That assumes lawyers don’t care. But I believe most lawyers take pride in their work. There might be a rare bad apple, but reputation is everything in this business. If you deliver poor quality, you won’t last.

Pim: So even under a fixed fee, quality tends to hold?

Dick: Yes. Most lawyers want to do a good job. The challenge is structuring the work. Not every case fits one fee. But you can break complex matters into parts and apply fixed pricing to the parts you understand.

Pim: That’s the smart way—apply fixed pricing where you can, and carve out exceptions.

Dick: Exactly. In finance work—my background—that’s become more common. When I started, it wasn’t. But now people see that most transactions follow patterns. And even in litigation, which seems more unpredictable, there’s a rhythm. Sure, things like hearings or extra witnesses can complicate it—but you can carve those out.

Pim: So fixed fee doesn’t mean rigid?

Dick: Not at all. It just removes time as the main variable. You can still build in flexibility. Fixed doesn’t mean “flat.” It means aligned. It’s about shifting away from time as the unit of value.

Pim: And with tech and support functions growing, the hourly rate becomes even more irrelevant.

Dick: Exactly. On the backend, you’ll still do cost management. But upfront, the hourly rate is becoming obsolete—and that’s a good thing.

Pim: I can imagine due diligence costs being reduced to a tenth of what they used to be—especially when productized and offered under a fixed fee. Combine that with generative AI and rule-based automation, and suddenly these services become faster, cheaper, and easier to deliver. But with that, turnover might also drop. Prices will come down.

Dick: That’s a major challenge law firms will face. The traditional leverage model—especially in big law—relies on a pyramid structure. One partner sits at the top, with seven or eight associates below, generating revenue. That structure has historically driven profitability.

Pim: But it won’t hold if the manual work disappears.

Dick: Exactly. That model will shrink. You won’t need an army of junior associates doing repetitive tasks. You won’t have to fire people today, but over time you’ll hire less. The pyramid will become steeper, maybe even more like a pillow. Fewer juniors, more experienced people.

Pim: So firms will need to rethink what leverage looks like.

Dick: They will. And clients will expect that change. If law firms don’t cut out the manual work, clients will go somewhere else. It’s not a question of if, it’s when. That means firms need to rethink their profitability and pricing models now.

Pim: Are there other levers besides headcount and automation?

Dick: Pricing can go up. We’re already seeing that—both hourly rates and fixed fees are increasing. And that makes sense.

Pim: Why does it make more sense now?

Dick: Because service delivery is more complex. In the 1970s, the hourly rate made sense. A lawyer had a pen and a secretary who handled the mail. Simple setup. Now, there’s a backbone of tech, legal engineers, process designers. Law firms need to explain that to clients.

Pim: You’re not paying €500 an hour just for the lawyer—you’re paying for the ecosystem behind them.

Dick: Exactly. You’re paying for the knowledge stack, the AI tools, the procedures, the playbooks. That’s how we deliver speed and quality. That’s the real product. Not the lawyer’s time.

Pim: So it's more like buying a service package. No breakdown needed.

Dick: Right. Like buying something in a supermarket—you don’t get a cost breakdown for every ingredient. You just pay the price. If you don’t like the price, you shop somewhere else.

Pim: So in the future, if a firm says, “We still charge by the hour,” clients will walk.

Dick: That’s already happening. Clients request quotes, compare prices, and pick based on value. Hourly billing just won’t survive.

Pim: It sounds like law firms have homework:

1. Figure out what they’re selling

2. Understand what it costs to deliver

3. Price it properly

Dick: That’s it. Those are the three steps. Some firms already think in terms of revenue targets. They just haven’t restructured their thinking around productizing services.

Pim: You mean reverse-engineering based on revenue goals?

Dick: Yes. At Loyens & Loeff, I could say, “We need €4 million—divide that by the number of deals, and you’ve got your price per matter.” It’s a start. It’s not perfect, but neither was the birth of the hourly rate.

Pim: And clients? Are they ready for fixed fees?

Dick: Many are. And if I were a client, I’d always want one. Like with a house painter—you’d never pay them by the hour.

Pim: And yet clients still sometimes ask for hourly rates.

Dick: They do. And I tell them, “Fine, I’ll give you an estimate. Maybe €50K, maybe €60K. Cap it at €70K if that makes you feel better.” But if I offer a fixed fee at €60K, the firm has flexibility to deliver it efficiently—and maybe even profit more.

Pim: So fixed fees can actually create room to undercut traditional pricing while still preserving margins.

Dick: Exactly. Fixed fees aren’t just fairer—they’re smarter. And firms that figure out how to structure them well will win.The fixed fee is more competitive than capped hourly rates. If you do enough matters, some will go over, some under, but it averages out. That’s fine for the firm—and better for the client. With a capped hourly rate, there’s no incentive to be efficient. You’ll always lose.

Pim: Right, if you give someone a task and three hours to do it, they’ll take the full three hours. That’s just how the brain works.

Dick: Or maybe three hours and fifteen minutes, because they start late, or get distracted. So yes, fixed fees benefit the client too. They offer certainty. How many times have clients had to renegotiate bills, question time entries, feel grumpy about expensive lawyers overcharging for coffee breaks?

Pim: And let’s not forget the unpredictability. You pay an advance—and it always gets exceeded.

Dick: Exactly. There’s another advantage, too. More and more clients are asking their firms to use AI. They want efficiency. But if you work with fixed fees, it’s none of their business how you achieve it.

Pim: Like hiring a house painter. You might want him to use a spray gun instead of a tiny brush, but honestly, you don’t care how he does it—you just want quality.

Dick: Right. If I give you a fixed fee, and I don’t use AI, that’s my problem. I’ll lose money. So I will use AI. You don’t need to enforce it. Clients trying to track whether AI was used are missing the point.

Pim: Focus on the outcome, not the process.

Dick: Exactly. I’ve negotiated countless hourly rates with procurement departments. They obsess over the rate, which is entirely the wrong metric.

Pim: Because a 20% discount means nothing if the work takes 30% longer.

Dick: That’s it. You’re measuring only one half of the equation. I could be slow, inefficient, and your discount vanishes instantly. If I use AI and the other firm doesn’t—what are you comparing?

Pim: So the hourly rate is broken. Outdated. Done.

Dick: Completely. And worse: it blocks innovation. Procurement teams should stop asking for hourly rates.

Pim: We'll need a new podcast title once it's gone for good. Anything else you'd like to share with our audience?

Dick: Just this. Clients need to stop accepting hourly rates. That’s the first step. There will always be exceptions—very specific or very small matters—but generally, clients should demand fixed fees.

Pim: And law firm leaders?

Dick: They must make the shift. As long as you cling to the billable hour, you’re disincentivizing innovation. You won’t adopt AI, won’t improve process, won’t rethink your model. Meanwhile, others will—and you’ll be left behind.

Pim: Like sitting below sea level, waiting for the tide to rise.

Dick: Exactly. The future is coming. Get ready. Innovate now. And pricing is your starting point.

Pim: Makes total sense. We spend so much time trying to motivate people to experiment with AI, but the better approach might be to create the incentive.

Dick: Yes. Incentivize it, and people will move on their own. Create new problems—good ones—so the system has to evolve.

Pim: I love that. Very pragmatic. Create the problem, so it can be solved. Dick, thank you. This was incredibly insightful.

Dick: You're welcome.

Pim: And thank you for listening to Beyond Billable: Lessons from Lexpo.

This podcast is a collaboration with NIO  and Lexpo, the legal innovation event.

If you have any questions following this episode, reach out to us at hello@clayrichard.eu.