Met demands cut-price rates as scandal hots up
Police force risks cutting quality of advice in wake of phone-hacking
Legal advisers have been stunned by the Metropolitan Police requesting rock-bottom hourly rates in its latest panel review, at a time when it faces an increasing chance of court action over its handling of the News International phone-hacking scandal.
The Met’s legal department is seeking rates of a maximum of £130 per hour from firms reappointed to its panel, prompting some to question the quality of service that the new legal roster will provide.
Tendering began last month, but some firms are understood to have withdrawn from the process, saying the low rates would make the work unprofitable.
A source close to the review process said the Met’s belt-tightening could leave it exposed to a lower quality of legal service just as the phone-hacking scandal ramps up.
“The Met has its own in-house legal department, but do they really want high street law firms advising them on phone-hacking matters? That’s who they’ll end up with if they request these sort of rates,” he said. “They’ll have to go off-panel to a magic circle firm for this kind of advice.”
The Met’s legal team comprises around 45 transactional lawyers. It last reviewed its panel in 2008, splitting it into different bands of expertise and practice areas, including property, employment and litigation.
Firms currently on the panel include Bircham Dyson Bell, Blake Lapthorn, Burges Salmon, Eversheds, TLT and Weightmans.
As part of the review process, the Met has requested that all firms’ bids include: hourly rates of £60-£80 for paralegals, legal executives, trainees, and solicitors with up to two years’ post-qualification experience (PQE); £80-£110 for solicitors or barristers with a minimum of two years’ PQE; and £110-£130 for solicitors or barristers with a minimum of six years’ PQE, including three years in the relevant category of work.
“The Metropolitan Police would normally be seen as a real trophy client, but I’d be surprised if many of the major public sector firms could make this work profitable,” a source said. “As public sector clients drive down the price of their work, the model of delivery that law firms have to come up with becomes more challenging. You have to look at the ratio of partners to more junior solicitors.”
Readers' comments (14)
Anonymous | 18-Jul-2011 9:16 am
Pulled out of this one already. Load of utter nonsense. If they expect to pay legal aid rates (or less) then they will only get small firms tendering without any police experience or large firms hoping to ride out the storm.
To all the large firms still in, a few words of advice, if you tender for £110 per hour for partner level advice in 2011, there is no chance of them accepting a bid of £200 per hour plus in 4 years time. If you value your advice at that level now, why will they pay an increase at re-tender? It's a race to the bottom and we're all complicit if we rate ourselves so poorly to compete.
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Pevil superevil | 18-Jul-2011 9:53 am
I do not really see the problem here. I think it is a chance for smaller firms to get a piece of the cake...
True that a magic circle firm has the big shots and all the super awesome superheroes of the public sector but that does not really mean that other, smaller, firms necessarily have to give worse advise....
Maybe it is a good thing for a market that is way too static with all the big shots?
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Anonymous | 18-Jul-2011 9:58 am
Anonymous at 9.16am is spot on. Spot on.
Perhaps if the Met stopped wasting is precious resources sending its senior lawyers to Champney's for their physio recovery (regardless that a third party paid the accommodation and food bills), it might find it could afford proper legal advice.
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James | 18-Jul-2011 10:23 am
I am sorry to disappoint anonymous - but a bigger hourly rate does not indicate that you are necessarily better qualified than others to advise. The firm I work for advises numerous police forces already and our rates are in line with what the Met wants - the work is still profitable for us and several of our own lawyers are chambers and legal 500 recognised. This is just the start, hourly rates have to come down across the board so firms better think about ways of improving efficiency or cutting overhead costs if they still want to do the work. It's not rocket science.
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Cousin Vinny | 18-Jul-2011 12:31 pm
Though I work for a Top 10 firm, I'm inclined to agree with James.
True, for most large firms, the fees that are expected will not be profitable. But I'm quite uncomfortable with this presumption that unless you use a large firm or pay more, you're risking cutting the quality of the advice!
Having had experience (and knowing people) on the current panel, you're hardly exempt from crap advice simply because you go for a big name! Though it might be a case of 'you get what you pay for' I think we'd be lying if we said in most walks of life we'd presume more money = more quality, they're haggling at a time when some work is better than no work for a lot of these firms!
I used to work for a firm where the fixed-fees for two blue chip companies were 15 years old. Not even a paralegal could make the work profitable, but they tattoed that they were clients on every piece of literature they ever produced!
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Filemot | 18-Jul-2011 2:16 pm
I am delighted that James' firm can make a profit. Just because the Met cannot afford the Magic Circle doesn't mean that it can't seek out and demand efficient expertise. There is plenty of scope are making a profit at £130 an hour, but not too much scope for corporate entertaining and that may be a blessing to all. By the way do the in-house department staff get £130 an hour ?
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Doogie Hauser MD | 18-Jul-2011 2:43 pm
@ Filemot | 18-Jul-2011 2:16 pm
'do the in-house department staff get £130 an hour?'
I understand that the inhouse Met team does not get this rate, however, a small number do get perks, such as trips to health spas and envelopes full of cash - apparently from a firm called Murdoch & Partners.
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Tim Child | 18-Jul-2011 2:57 pm
It's all very well pitching at <£130 p.h. to get the work on the basis that they're a "trophy client", but thanks to this new article and the wonders of Google, f you advertise that you work for the Met all your other clients will wonder why they can't also get you for <£130 p.h.!
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Jules | 18-Jul-2011 3:21 pm
I agree with James to some degree. I am interested in understandin how they make it profitable. Can you afford £130 and cover the cost of training new lawyers as well. I.e. does £130 allow for succession planning?
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Tony | 19-Jul-2011 9:27 am
To me the real underlying issue here is the excessive hourly and total cost of legal advice. This frequently puts off both corporates and individuals from obtaining some types of legal advice. If higher rates are needed to be profitable (albeit what you count as profitable depends on the firm), something is wrong with the law firm business model. A key reason for the level of rates is the historical way the market has developed. Bit by bit it has to change. Drive to the bottom? Not necessarily- more a realignment of what is a fair price, just like any other type of goods and services in a competitive market.
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Anonymous | 19-Jul-2011 9:51 am
As a buyer of legal services, I welcome competition in the marketplace.
The last twenty years have seen fees rise rapidly, PEP go through the roof and the quality of your average solicitor fall.
If you quote for my work, you don't get to come back at the end and ask for an extra 20%.
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The Buyer | 19-Jul-2011 11:12 am
How about partner's stop looking at continuously increasing their annual partner profits, take a look at the economic conditions and take a pay cut or go on one less exotic holiday every year. The days of lawyers milking the system are slowly coming to an end with eagle eyed legal buyers involved. Why do we have cost draftsman? Would it be because lawyers can’t be trusted....
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James | 20-Jul-2011 9:17 am
The reality is that in other parts of the country SME firms with very skilled lawyers who do not automatically meet the "big firm" persona are able and willing to take on these clients. Owing to their vastly reduced overheads they can still make a nice profit on the work. The average salary for a 3-4 PQE litigation solicitor in an SME in Bristol or Cardiff will be circa £30-£42k (see hays market rept), compare that to the likes of the big firms. Its probably about time that some bigger company's started to look further afield and took off the rose tinted specs that price always equals quality; a litigator by trade, I have had opponents who are both magic circle firms and trans-atlantic firms - and I really don't see what the fuss is about.
Just for the record legal aid rates o/s of London can vary between £40-£90 per hour dependent on case - therefore to a lot of firms a £110 an hour or more is a nice little earner thank you. very much.
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Anonymous | 20-Jul-2011 11:16 am
Perhaps panel firms should charge the MET the same rate per hour that the MET allegedly charged News International for information....!
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