Hourly billing 'incentivises inefficiency', says Neuberger

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Readers' comments (25)

  • Many other types of business have hourly costs but do not charge hourly rates.

    There is no real reason why lawyers can't make greater use of fixed fees, conditional fee arrangements and (when the regulation allows) contingency fees.

    Fixed fees are fundamentally different to capped fees because under a capped fee arrangement the lawyer takes all the risk; under a fixed fee arrangement the client shares the risk.

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  • By the time you transfer from one solicitor to another the bill has been hiked up already.
    Client should be given a choice of the way they should be billed. After all solicitors live off their clients. That is their bread & butter.
    It is a known fact how solicitors hike up their bill into thousands of pounds.
    I think only those solicitors are objecting to Lord Neuberger because they are the ones who are milking the clients.
    Clients need protection against those solicitors who exploit the system.

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  • I see Neuberger's point but there is clearly a distinction to be drawn between litigation costs (particularly where the other side pays) and say, corporate costs.
    Having (briefly) worked in a “no win, no fee” sweat shop, I regularly witnessed senior colleagues engage in long, meandering debates over peripheral issues; spend an age on the telephone to clients harping on about often superfluous information, and taking forever to dictate or type often far too convoluted letters, with all the time recorded and later charged. I was once interrogated by a partner for my comparatively low time recorded on a settled matter, and I was forced to negotiate a higher costs figure with the other side based on time which had never been spent.
    Now I work in a corporate department which is plainly in stark contrast to the PI world. The client pays and the “something for nothing” culture is rife with most clients driving a hard bargain at the outset and later haggling over/complaining about the final bill. Having said that, I have some sympathy, as initial estimates are regularly exceeded. If you went to a mechanic for a new cam belt for your car, and received a quote for £400, but then ended up getting asked to pay £800, you’d be furious. Even as a lawyer, if I ever need and have to pay for legal advice, there’s no way I’ll agree to paying anything other than a fixed fee made clear at the outset.
    The hourly bill creates an obsession with time and pulls solicitors in two totally different directions – on the one hand trying to keep your time as low as possible for the client, on the other hand trying to keep your overall time recording figures high to hit your firm’s targets. A fixed pricing structure is practically inevitable, where firms take the rough with the smooth and quoting has to be improved. It will reduce stress levels for solicitors and will foster stronger client relations. If clients demand a crazily low fee at the outset, then good luck to them in finding somebody else stupid enough to do the work. Other professions manage to do it profitably, and so should the legal profession, otherwise outside influences in the new ABS world will find a way.

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  • A talented Lawyer/Solicitor neighbour of mine, working for a large ahd 'respoected' national firm is thinking of leaving the profession after just 7 years of practice as she is fed up with being challenged to produce 13 hours of 'billed time' during a 9 hour woking day!

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  • I meet up with my £240/hour lawyer
    I am in desparate need
    I talk.
    I'm not that efficient - not my fault, I just was born that was, just like every other Joe Public.
    I am under stress: Every 15 seconds I talk runs up £1.00
    I try to dexterily convey the concerns - 60 seconds pass, that's now cost me £4.00
    And the lawyer hasn't yet advised me.
    In a 5 minute chat where I do all the talking, and he's not said a word, I've spent £20.
    What have I received for my £20? Nothing - because I've done all the talking, he's said nothing.
    So I cut my story short - I don't give the full picture. And therefore his advise cannot be according to my situation.
    I believe that everyone should have access to legal help: yet the reality is not the case. Even in the UK with the Legal Aid Board, I've personally been stung where a lawyer at the Citizen's Advice Bureau explained this wouldn't cost me anything, and it's an easy case. My bill was £10,000, increasing at 8% (statutory interest rate) and is now a charge on my property. How can this be right? I never agree to this, and I never saw it coming.
    "Hourly rates incentivises inefficiencies" - I am easily persuaded towards this argument; I'd struggle to see it any other way.
    I have personal experience, and this is fundamentally wrong.

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