Marilyn Stowe Blog

Unravelling legal fees: Is it all just a question of respect?

Legal fees can get many people hot under the collar. Never more so than in family law cases where the subject matter is personal and emotionally charged, and when a client can think of far more pleasant ways to spend his or her hard earned cash.

Nonetheless I have found over nearly thirty years that the vast majority of people will instruct lawyers, build up a good relationship, pay their bills and move on with their lives without a problem.

In my firm, first of all, we do NOT pay referral fees we never have nor ever would. Clients sign a retainer which clearly states each fee earners charge out rates. There are no additional lump sums added to the bill for unrecorded time. Bills are calculated by reference only to recorded time and if time is unrecorded, it is not charged. Clients receive a fully itemized bill which they may always cross check against their own files. Our Admin team is ready, willing and able to assist clients to understand their bill. We give a costs estimate at the outset and if it becomes necessary to amend the estimate at any stage then we do so.

When it comes to paying their bills, and even with the best will in the world, and as hard as we try, some clients will have a genuine gripe. It is not systemic, sometimes things go wrong and slip ups happen. Rarely, but they do happen. Professionals in one field are the same as every other, none are exempt from unintentional error– we are all human. In these exceptional cases every attempt is made to sort the situation out to the satisfaction of the client.

But on other occasions some clients will simply refuse to pay for no particular reason, which is a sad reflection on the way society’s attitudes have changed in the time I have practised law.

Once (and this was the case when I started my first work placement before I qualified) solicitors charged in guineas, and no one ever questioned their fees. I think that was wrong too. But there is a fair balance between the two positions and no reason why there shouldn’t be respect between solicitor and client in relation to fees.

There are some who see no reason to pay a lawyer, because they believe they can do just as well themselves. Fair enough, that’s their decision.

Others however (and I accept it doesn’t happen often) will instruct a lawyer, but throughout the process will maintain an unspoken desire for a reduction in their bill – despite having signed up to a costs estimate at the outset. When the bills arrive they will exaggerate the number of complaints they have, in the hope that their solicitor will reduce the fee for a “quiet life”. This may occur because the client has unrealistic expectations that can never be satisfied. Or they may simply want to pay less than they have agreed to pay.

Some solicitors I consulted tell me they usually have to play ball – the alternative is a formal complaint and the time consuming process of justifying their position. Sometimes, in a small firm with no admin team, it is cheaper and easier for them to give in despite their being no justification for a reduction at all.

There are also (thankfully even rarer) clients who never have any intention of paying their bills and never do. I know of one man we were acting against who instructed three sets of lawyers and incurred very substantial costs with them all. He declared himself bankrupt and failed to pay any of them.

Any number of developments may have contributed to the belief that the lawyer of your choice should be an entitlement that you don’t have to pay for. The increase in “no win, no fee” legal services and an ever-growing compensation culture may be factors that have led some to believe lawyers don’t need to be reimbursed. Perhaps it is also something to do with the way complaints against solicitors’ costs are now routinely treated.

It has become much too easy to ‘nitpick’ and complain free of charge, after the case is over and before a bill is paid. Most solicitors have a horror story to tell of their treatment during an assessment process led by a district judge who seemed anxious to please an unrepresented litigant. There are similar tales of woe at the hands of the Legal Ombudsman or their predecessors, who often give the impression that unless a solicitor discounts a bill the problem is not going to be resolved easily. One solicitor based in London at a “Magic Circle” firm told me she has become almost ill from the stress of an investigation into the charges she rendered in a particular case. In this instance she believed the client had lodged a complaint to simply get some money back. They can do it because the service is free, so why not?

Another solicitor who had successfully handled a complex case for a client told me that his firm had received a surprise letter from the Legal Ombudsman six-months after the case had ended. He thought he was on good terms with his client, but was asked why he hadn’t offered them a “Sears Tooth” agreement or deferred payment until the end of his client’s complicated multi-million pound divorce. “Because I’m entitled to get paid under the terms of the retainer she signed”, was his concise reply.

That lawyers come in all shapes and sizes and charge different rates is a fact. That some lawyers choose to practice at Mayfair prices is their choice. If that’s what the lawyers want to charge you for their services, why not? But they have to be very good and justify their costs; otherwise no one would instruct them.

There is a place in the market for all legal firms and plenty of choice for those looking to instruct one. We can’t all go to Mayfair to buy a fabulous pair of designer shoes. Most of us buy similar goods without the brand name elsewhere. They may not have the same “cachet”, but that’s how it is.

I started my first small office wanting to practise law to help people. I loved communicating with them, having my ups and downs with their cases, and above all succeeding in the days when you really did win or lose in family law. I was, and remain, driven by a desire to be successful for my clients.

However, if you are good at your job people get to know about it fast. Your business grows and you do become successful. You learn how to run a business, and that running a business requires a solid bedrock of capital to fund it. I once met a solicitor trying to run his busy practice with a shoestring staff in the tiniest of premises. He wasn’t able to (or perhaps couldn’t afford to) invest enough into his firm and it made me shudder. The client must come first. If there aren’t sufficient resources within the firm, how can anyone expect to do a good job for the client? Resources include staff, IT, training, books and a host of other costs in common with all other professional firms. The busier the practise, the higher the running costs will be. And for it all to work bills do need to be paid.

A lousy lawyer, or indeed anyone in any field, may see other people succeed and think that it is easy. But if a person is driven principally by the desire to make money they are never likely to sustain success. To succeed you need talent and have to care about your clients’ needs. There are poor lawyers but the market will inevitably weed them out. All the marketing in the world can’t continue to sell the skills of a lawyer. Only their clients can ever do that. And clients vote with their feet.

So my feelings are straightforward. I work hard and I charge a rate for which I will handle your case. I will work damned hard to get you a result and I am not afraid to fairly address any concerns you may have along the way. My colleagues’ fee scales will differ, but they will do the same.

We do offer Sears Tooth agreements to some of our clients if we think they are getting a rough deal and couldn’t otherwise go to court and get a decent result. The risk of getting paid then becomes ours – and don’t underestimate the size of that risk. We also do some work entirely pro bono – free of charge – knowing it is likely we will never be paid at all.  And both can only be offered within the context of a sound commercial footing.

During the recession houses took longer to sell, bills took longer to be paid and the impact was so seriously felt by some law firms that they literally collapsed. Law firms need strong roots in order to thrive and survive long term. It is my aim that in fifty years’ time my firm will still be standing and serving its clients well.

The removal of legal aid from deserving people is a scandal, but is a decision by our elected government. It’s not the fault or responsibility of lawyers, who shouldn’t have to work for less than normal – unless they choose to do so. And we shouldn’t be made to feel guilty or undeserving of respect as a result, especially if the risk of taking on a case where payment may never be received is considered too great.

Ultimately, the success of a client-lawyer relationship and this whole discussion boils down to one word I have used throughout: respect. If mutual respect is maintained then a client will value their lawyer’s professionalism and trust them to deliver the right outcome. And in turn a lawyer will treat that trust with care and do their utmost to ensure it is never broken.