Barristers are celebrating the news that payday is set to become a more regular fixture. After almost a decade of negotiation and stalled talks, the Law Society and Bar Council have struck an historic deal to make arrangements for paying barristers contractually binding by this October.

At present, the standard terms of work do not create a contract that is enforceable through the courts. But the changes, which come as the Bar moves to reposition itself ahead of the impending legal service reforms, will enable barristers to sue solicitors for non-payment off the back of a legally-binding invoice.

The agreement has been welcomed by barristers and solicitors, with both sides happy to see an end to the 'anachronistic' system currently in place, which sees clerks issue the instructing solicitor a 'request for payment fee note' on behalf of the barrister concerned. Under the proposed system, any fee dispute will go to a compulsory arbitration scheme before a joint panel. Once a decision has been reached, barristers will be able to sue for outstanding fees.

The biggest problem with the current system is the length of time it takes for barristers to receive payment, rather than firms refusing to pay or disputing the fees. Young barristers in particular are hoping the new terms will ease cashflow problems which have been exacerbated by a slump in litigation work.

Historically, objections to changing the current fee arrangements have included tax disadvantages, the danger of onerous terms being added to the contract and even the 'distastefulness' of lawyers suing each other.

Skadden Arps Slate Meagher & Flom litigation head Paul Mitchard dismisses this sentiment, voicing his support for the agreed changes: "For solicitors, the barristers' billing system is antiquated and confusing – it is still based on a 19th-century-type billing style. The fact that barristers cannot sue for outstanding fees is ridiculous and an out-of-date theory."

Bar Council chairman Geoffrey Vos told Legal Week: "This is a complete revolution – it is intended to be even-handed and fair for both solicitors and barristers. An agreement has never previously been reached on a payment scheme which has been approved and endorsed by both the Law Society and the Bar Council. It will be a big cultural change for both sides and put the profession on a more commercial footing."

The new contractual terms are to drawn up by a working party before both the Bar Council and Law Society set to work educating the profession on the new way of working. Members of the working party include Andrew Mitchell and Tim Straker, of the Bar Council's fees collection committee, and Law Society policy adviser Jenny Rawstorne.

Solicitors have, however, expressed concern about how the new fee arrangements will work. "The question with the new system is what the terms of the contract will be," said Herbert Smith litigation partner Ted Greeno.

The timing of the fees agreement is vital, as it will take effect shortly before the Legal Services Bill allows ownership of firms to take effect and law firms and chambers to merge.

Vos agreed that the changes put the Bar on a much more commercial footing. "It has been a long, drawn-out process with difficult issues that needed to be addressed. This part of the profession has not before operated on a contractual basis so it is a big cultural change," he said.