Fixed fees v hourly rates
|"Are you sure you're not undercharging, Mr Diable?"|
The Legal Services Board (they oversee the legal services regulators – they’re the bosses bosses boss) has published research showing that firms charging fixed fees are likely to be cheaper than those charging hourly rates. This is something most of us in the legal services industry already knew.
At London Drink Driving Solicitor, we think that we should be providing an excellent service for a reasonable price. That doesn’t mean the cheapest - you can get cheaper and with some of those firms you will get a worse service, trust me I’ve reviewed some of their files for unhappy clients. But what it does mean is that when you instruct a solicitor like me who is working on a fixed fee you know what you are going to pay.
Let me give you an example, I currently have a civil law solicitor doing some very simple debt work for me. He originally estimated £500 for the entirety of the case. So far I have paid him £1,825 and the case hasn’t even got a court hearing yet! Unsurprisingly he’s charging me by the hour. That’s great for firms because they can estimate a fee and then if they decide case is "more complex" than they expect the fee can go up. They don’t run any risk because if you as a client don’t like it and refuse to pay they’ll stop working on your case!
Whereas, if I say to a client “I will charge you £X” then I know I have to get the fee correct first time because there is no option to raise the price later. This is easier for me because I have specialised in drink driving law for years now and am very good at spotting the issues in cases so I rarely get it wrong. But, from a client point of view it doesn’t matter if I get it wrong because I still have to provide them with the service so if I were to undercharge them they get an even better deal.
Let’s take a typical case I conducted recently. The client, was accused of failing to provide a specimen of blood for analysis. In preparing that case, I held consultations with the client and his witnesses, I prepared witness statements, reviewed evidence and prepared for two trials (two because the court treble booked the first trial; this is quite normal sadly). I’m looking at the claim for payment I submitted to the government agency that refunds legal costs and I can see that preparation took a total of 31 hours! There was 6 hours and 30 minutes of travel, no waiting, 20 letters and about five hours of advocacy.
At an hourly rate that fee would total £7,525. Looking at my total invoices to that client he was charged a total of £3,600 for over 42 hours’ of expert legal work by a specialist solicitor that resulted in an acquittal. By the way, that's 53% less than if the client paid by the hour!
Although, an innocent defendant can claim their legal costs back from the government it makes no difference to how much you get back whether you pay £7,525 or £3,600 because the government has put a cap on what you can claim.
So, should you be paying solicitors by the hour or on a fixed fee basis? That’s a decision for you, but it pays to speak with an expert who knows what work is needed on a case and who can keep costs down.
If you do need a solicitor who charges reasonable fixed fees you can reach me on 020 8242 4440 – just saying.