In Ultima Online, on some servers, you actually went to a magical jail as a ghost if the guards killed you when you were a murderer and players of a certain religion were able to send you there too. Other criminals could break you free, they killed a bunch of monsters in a dungeon and pulled some levers and maybe did some lockpicking too... or you needed to do your time. It was a nice system I think, and it could work here too. Like it was said, this is an MMORPG with open PvP, not just a PvP griefing simulator. Your evil deeds have consequences.
If we had a jail system here.
10 Minutes per Murder, up to a maximum of 12-20 would be reasonable. And this should be Online time. If the sentence could be served offline, then it should be like 1-3 hours per kill, up to a maximum sentence of 2-3 days or maybe even up to a week.
Also you should be able to choose a longer sentence, something like 3x the maximum sentence - this would grant you a pardon for your past crimes and give you a chance to re-integrate with society.
And before all criminals and murderous c-words start crying that "this is a hardcore game, just learn to deal with PvP" - the same right back at you. This is a hardcore game, there should be consequences for your actions and do your time like a man.
PS. Back in Ultima Online, my main characters were always red and I waited countless hours in jail while my friends coordinated a rescue, sometimes took days to get out.