Kerry Underwood

FIXED COSTS: GRADES OF SOLICITORS AND LENGTH OF CALL OF COUNSEL

with 4 comments


This is all dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs which will be out in March. This is three volumes and over 1,300 pages. You can pre-order your copy at a discounted price of £68 including P&P (normal price £80 including P&P) by 6 March.

 

To pre-order your copy, contact Kerry Underwood on 01442 430 900 or email kerry.underwood@lawabroad.co.uk.

 

This is also all dealt with in my Personal Injury Reforms course this May, which can booked here – early bird discount for booking and paying by 6 March.

 

In a fixed costs regime should there be any variation of fixed fee depending upon the grade of fee earner and the seniority of counsel?

 

No, in my view. This would not be a truly fixed costs scheme as if there are different fixed fees for different grades of fee earner and seniority of counsel, then that opens up a can of worms in that the paying party will always be able to argue that a more junior level of fee earner, or a less experienced barrister, should have been engaged on the work.

 

Arguments about the level of fee earner are amongst the most common disputes in detailed assessments and indeed it is rare to see a case where the paying party is not alleging that a lower grade fee earner should have been used.

 

In fact the extra amounts for more senior fee earners are very low – around 14% extra for a grade A fee earner as compared with a grade B fee earner, for example.

 

A blended rate, taking into account different levels of fee earners, but resulting in a fixed cost, whatever the seniority of the lawyer, benefits better lawyers and will tend to benefit more experienced lawyers.

 

This is because an experienced lawyer will generally be able to deal with work and make decisions in far less time and will gain a far greater advantage than the 14% extra or whatever.

 

It is the classic conundrum that I pose in my lectures.

 

A client rings up at 2.00pm with a query and the lawyer does not know the answer and says she will look it up.

 

The lawyer does so, takes one hour to do so, and then telephones the client with the answer and says that there will be a bill on its way for £200.00.

 

By a remarkable coincidence, as the lawyer puts the phone down, another client rings with exactly the same query.
Does the solicitor:

 

  • give the answer there and then and tell the new client that it is not worth preparing a bill;

 

  • tell the client that she will research the matter and get back and then subsequently telephone the client and charge £200.00 for the advice; or

 

  • tell the new client that she knows the answer and the fee will be £250.00, the rationale for the higher fee being that she is now a better lawyer than she was an hour ago as she knows the point without the need to look it up.

 

That is obviously an extreme example to make a point, but the general logic of it applies to a great deal of civil litigation.

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Written by kerryunderwood

February 21, 2017 at 9:34 am

Posted in Uncategorized

4 Responses

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  1. Why was splitting the cost between the two not an option? He could tell the second client that he needs half an hour to look into it.

    The first client is happy because they get a 50% discount and the second is happy because they got a relatively quick answer relatively cheaply.

    Perhaps it’s a defendant thing.

    Russell

    February 21, 2017 at 9:40 am

    • Well-it’s all about what we are paid for. Why should time spent have any relevance whatsoever? Should you get charged less for a medium rare steak as compared with a well-done one?

      Kerry

      kerryunderwood

      February 21, 2017 at 9:45 am

    • “Why was splitting the cost between the two not an option?”

      Firstly, because she’d already put the phone down to the first client. If she then rang back and said it was only £100 the client would probably be more suspicious than pleased, thinking she’d tried to overcharge but then panicked / had a twinge of conscience and reduced the charge.

      Secondly, because splitting the cost is just plain daft. By your logic, if a third client then rang with the same question the lawyer should reduce the fees to the first two, and then as word got round a fourth client rang … and so ad infinitum.

      But thirdly, and most importantly, it’s the value to the client that’s the important thing, not the cost to the lawyer. This is well illustrated by an old story:

      The elderly engineer, Tom, retired and a few weeks later the Big Machine broke down, which was essential to the company’s revenue. The Manager spent a couple of days unsuccessfully trying to get the machine to work again so the company called in Tom as an independent consultant.

      Tom agrees. He walks into the factory carrying a large sledge hammer, takes a look at the Big Machine, and whacks the machine with the hammer whereupon the machine starts right up and continues to run perfectly. Tom leaves and the company is making money again.

      The next day Manager receives a bill from Tom for £5,000. Manager is furious at the price and refuses to pay. Tom assures him that it’s a fair price. Manager retorts that if it’s a fair price Tom won’t mind itemizing the bill. Tom agrees that this is a fair request and complies.

      The new, itemized bill reads….

      Travel and attendance time: £50
      Knowing where to hit the machine with hammer: £4,950

      Michael Loveridge

      February 21, 2017 at 11:33 am

      • Thank you Michael. That one is going straight in to my lectures😄!

        Kerry

        kerryunderwood

        February 21, 2017 at 12:37 pm


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