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News article

Legal Fees: Hourly Rates v. Fixed Fees

Solicitors "must stop charging hourly rates" says Lord Neuberger, the Master of the Rolls.

Lord Neuberger, the country's second most senior judge, claims that legal firms that base their charges simply on costs "do not deserve to succeed" or even "survive"! He went on to say that "hourly billing at best leads to inefficient practices, at worst it rewards and incentivises inefficiency. It penalises those who are able to bring cases to a close quickly and fails to reward the diligent, the efficient and the able: its focus on the cost of time, a truly movable feast, does not reflect the value of work". Lord Neuburger concluded: "Rather than treating time as the commodity which is being sold, we should be adopting an approach where skill and experience are the commodities which are sold".

Hourly rates certainly cannot be said to incentivise solicitors to achieve completion of a matter in the shortest possible time or with the greatest efficiency. And, more importantly, the major downside for the client is that they invariably have absolutely no idea at the outset what their total bill will be. In the present economic climate few clients have the luxury of not having to consider the budget for their legal fees.

It is also true to say that in recent years there has been evidence of an increasing amount of Fixed Fee work being offered by law firms particularly in the area of domestic conveyancing. Certainly, at Hudson Law, we would agree that some legal matters are very much easier to assess on a Fixed Fee basis than others, where, for example, limited available knowledge at the outset of the issues, or levels of complexity, might make it quite impossible to estimate the level of work and the number of twists and turns which may occur in the life of a legal transaction.

However, that being said, it is very much the policy at Hudson Law to offer clients a Fixed Fee wherever possible in the area of Probate, Domestic and Commercial Conveyancing, and Family law.

Judi Lurie Head of Resources Hudson Law

Source: The Daily Telegraph, Saturday 12 May 2012

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