Clients rail against botched litigation budgets

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  • Is it surprising that litigators are unable to predict the future and in particular everything that will be said by every witness and everything that is contained in every document?

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  • A fair point, but with respect going 100 percent over budget is unacceptable. Clients pay top dollar for these services and most other industries and service providers can provide accurate fee estaimates, why can't lawyers? The days of pulling clients into litigation and then budgets going out of control are over.

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  • I agree that going 100 percent over budget is unacceptable especially if done to secure the job as seems to be suggested; but is it true that most other industries and service providers can provide accurate fee estimates? The Olympics and many major IT contracts, let alone the proverbial builder, readily spring to mind.

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  • When litigation lawyers become clairvoyants, or assume total control over all aspects of a case, then they will be able to estimate fees accurately. If you are selling widgets, or building a house (though apparently not an aircraft carrier) you can estimate the costs; where there are so may variables out of your control it is unreasonable to expect a spot-on estimate. I get annoyed with clients who ask for work outside the agreed scope on which the estimate was based, then whine about the estimate "not being accurate".

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  • Litigation lawyers have been milking clients for years and running up unnecessary costs in cases - a clear conflict of interest between acting in their clients' best interests and maximising their fee income at every stage. Any attempt to claim otherwise (as above) is surely only from worried litigators that the gravy train is over!

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  • The "how long is a piece of string" line is wearing a little thin. The signals to the market are clear: large corporate buyers of legal services understandably expect price certainty from their providers, who need to respond by accepting responsibility for their quotes and sharing some risk. There is also the small matter of costs budgeting being imposed by the courts.

    With all of the "can't do" messages coming from the market it is little surprise that the growth in in-house legal teams, at the expense of private practice, continues apace.

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  • Whilst I have no doubt that fixed or capped fees in litigation definitely have their place, it is very difficult - if not impossible - to estimate costs for a large piece of litigation from cradle to grave. The client might decide to take a different path halfway through, unforeseen applications, counterclaims etc all could play their part. How can you estimate for things that you don't know about?

    Of course, litigation can be broken into sections and fixed fees can be used for each part. But it is far easier to estimate costs for, say, defending a counterclaim having seen it than it is out the outset and guessing what the other side are going to say.

    As for the assertion that there is an inherent conflict between maximising fee income and client's interests - that is a question of ethics, commerciality and pragmatism. Client's interests should always come first.

    Communication also plays a massive part here. Clients want (need) to be kept informed of what is going on. If it goes over budget but they understand why then it is a much easier conversation. Do clients want fixed fees? Perhaps. Some still want hourly rates. Surely it is as much about quality and efficiency as it is about a (fixed) fees.

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  • In house counsel are already in my top 10 list of "world's most intelligent and sophisticated consumers". I really don't think they need assistance from the judiciary, the press or from anyone else to make their purchasing decisions. The passionate desire of external commentators to interfere in the pricing structures of a whole industry really shows a very unattractive part of human nature. I would rather intelligent and frankly wealthy individuals started campaigning about gas prices and stopped pushing for the total nationalisation of litigation. Can sophisticated adults be trusted to do their own Christmas shopping without a judge in tow to knock down the prices for them?

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  • Another view - http://sites.addleshawgoddard.com/lawrethought/2013/10/22/lessons-in-law-why-do-lawyers-still-rely-on-the-hourly-rate/

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  • Change is inevitable post-Jackson, post-Mitchell. End of. We need to adapt as no-one in government is listening. If as a profession we're not good at estimating costs then we need to get better. But £850 plus VAT hourly rates are unlikely to get very far in this brave new world come budgeting time. Market demand is playing its part in pushing up price. It's difficult to artificially restrict this if it is what clients want to pay. If that's the case, client needs to be on the hook for the difference in hourly rates compared to hourly rate the court approves in the budget...

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