Hourly billing 'incentivises inefficiency', says Neuberger

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Readers' comments (25)

  • It is absolutely ridiculous for the judiciary to be interfering with how firms operate their own commercial business. The hourly rate may not always be appropriate but sometimes it can be a more cost efficient way of billing the client, sometimes they want it to remain that way. It's their choice and bureaucrat's shouldn't be interfering with over bearing legislation.

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  • @Anonymous | 16-May-2012 3:50 pm
    I absolutely agree. The legal market is competitive enough if clients think they are getting screwed over by hourly billing then they have the choice to change to another firm. Similarly, if one firm switches over to value-based fees and clients flock to them then other firms will have to follow if they are losing work. It is a commercial choice not a judicial one.
    Also, while hourly billing perhaps "leads to inefficient practices, at worst it rewards and incentivises inefficiency" fixed fee work can be just as perverse, incentivising cutting-corners - but then again I don't think the MR has been on an all-inclusive holiday before...
    The only thing I would add to this is that in the PI and Criminal Law context there is more of a justification, as typically clients only need their lawyers once and having a clear "it will cost £x" could be quite beneficial for making comparisons.

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  • @Anonymous | 16-May-2012 3:50 pm
    I take the point about 'forcing' firms to drop hourly bills. But, perhaps instead the courts and/or Government, and/or SRA, should make it mandatory that all clients are offered the 'option' of fixed fees should they want to be billed that way.
    One could argue that it is a key part of UK consumer rights for a client to be allowed to be billed the way they wish for professional services, and that billing systems should not be dictated by law firms as this distorts the market, hurts freedom of choice and as everyone now agrees is rarely in the interests of the client.

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  • Agree with all the above. It does not incentivise anything. It is a way of charging for services. How did Neuberger charge for his services ? Oh sorry, forgot, he got that cockney barrow boy in the clerks room to do that grubby work for him. You're a bright fellow Neuberger, but stick to the finer points of landlord and tenant in your Ivory Tower. And then back to the mansion paid for with over-sized brief fees.

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  • @Mr Clementi | 16-May-2012 4:30 pm
    What utter tosh. In what other commercial enterprise are clients/customers given a choice (as a matter of course) as to how they pay their bills. Very few. Why should law firms be any different?
    As some posters above have pointed out, there are plenty of firms to choose from and if you don’t like how one firm bills then move to one that you find works for you.

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  • Don't you just love it when the judiciary (mostly ex barristers) criticize hourly rates when their careers at the bar earned them huge fees based on grotesquely high, guess what, hourly rates!

    As a mere litigation solicitor, I'm supposed to be able to either guess how much a case is going to cost at the outset and offer a fixed fee (the risk being all mine) or have to work under some contingency arrangement again at my risk.

    Yet the silence on the withdrawal of legal aid that pays solicitors, often at less than 50% of their expense of time, and after a lengthy delay, by the same judiciary is silent. I think I'll look for a different job. "Was that a Big Mac and regular fries, sir?"

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  • So what is the threat from ABSs? For example the accounting profession is still largely hourly rate based. If you are saying hourly rate based is out then you are saying that ABS with accountants are out as their business model would change.

    Fair fees are about fair splitting of risk and reward on a project whose scope and outcome is uncertain. In some cases there is scope for outcome based alternatives. In others hourly based, possibly with a volume discount, is appropriate. Fixed fee only works where there is certainty on the project scope at the outset.

    Oh I'm an accountant. Same issues. Different profession.

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  • @ultimate warrior | 16-May-2012 5:22 pm

    Thanks for that forthright opinion Mr Warrior....let me make sure I never use your law firm.

    And the profession wonders why clients are increasingly dubious about the way they are treated.

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  • Sorry, why is this news? This story was in The Telegraph over a week ago.

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  • This story is juxtaposed next to one which discusses Mr. Grabiner's '3K an hour fee'. Oh, the irony!

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