Issues with hourly billing and efficiency. Long term pricing model based on fixed fee is seen a s key to efficiency – page 2155
Looking at law firms in the US corporate clients are exerting more control over costs:
Roughly one-third of companies also are experimenting with alternative fee arrangements. IKON Office Solutions, for example, uses fixed-fee arrangements for all of its non-compete litigation. Such agreements provide valuable predictability for companies seeking to create budgets at the beginning of the year. Other corporations have experimented with more complex fee regimes in order to give firms an incentive to resolve matters quickly. Blended rates, in which the client and law firm share both the up-side and down-side of legal risk, are becoming increasingly common. Still other companies, most notably General Electric, have conducted online-auctions to find cost-effective firms. Page 6
Reports on a new law form MJ Hudson that is offering an
alternative to hourly billing by following the investment bank model of a monthly retainer and a percentage of any successful transaction (although
Discusses payment schemes for media cases (privacy etc), employment tribunals (page 6).
FGF fees calculator showing how fees are compiled for family legal aid work undertaken by a barrister – variables include type of activity, function, category and level of advocate.
Pages xiv – xv
Information on charging structures and expected changes
paper asks whether price transparency is always a good thing (page 13) – firms can see what their competitors are charging (page 14). Sealed bid actions are generally preferred (page 15) to avoid dangers of collusion.
Reports a study of personal injury cases involving different sources of plaintiff finance (in particular legal aid, private finance, legal expenses insurance and trade union finance). This allowed the researchers to consider the impact of the source of finance on the handling of the case. They found that:
Legal aid appears to focus on the severity of an injury, whereas other sources of finance such as trade unions are more likely to take account of liability. Privately financed cases were likely to be associated with high levels of defendant (perceived) liability.
Legally aided cases consistently are associated with longer delay to case closure than alternative sources of third party funding (legal expenses insurance and trade unions) or private funding, even having controlled for case severity. This reflects different incentives facing clients and lawyers to settle. From the NHS Trust dataset, we found that:
Highlights increasing resistance from clients to pay by the hour, wanting fixed fees. – page 10
A quarter of legal execs surveyed said they had carried out pro bono (i.e. free) legal work – page i.
Services delivered by Citizens advice, substantiated by research:
Around 3 million people are helped each year, covering over 5 million problems. The satisfaction rate of clients is very high.
Argument for highly graduated fees – costs are driven by Characteristics of Client, Characteristics of Case, Client’s Role & Related Preparation, Seriousness of Consequences of Failure in Court – Pages 71-96
Lawyers undertake training at the start of their career to obtain relevant qualifications, they then develop these skills over time, develop reputations, valuable contacts, etc. If the lawyer acts as a sole trader then these skills will be reflected in their fees with the better lawyers being in a position to command higher fees. Economists tend to refer to these personal skills as human capital and think of the fees as the return on that capital – Page 1
we have good evidence in other professions that behaviour is
Overview of how barristers set their fees – page 10
In the 1990s, for city law firms an entrench culture of long term client loyalty and limited fee negotiation came to an end, as corporate client sought to reduce costs. Fees set against an hourly rate or by reference to the value of a transaction gave way to the price for the job, via competitive tendering. Page 19
Suggestion that higher rates of pay is linked to better service -
when asked what would improve the service that they provide, 19% of barristers say better pay, 9%, more specifically, say better pay for legal aid, and 9% say better listing by courts – page 21
See Figure 12.
In the US, contingency fees are typically around 33% (page 8). There’s no regulatory cap on them.
Summary of fixed fee payment reforms (page 20) – and some of the challenges this new system posed.
Breakdown of fee calculation for clients who are employers where a case goes to tribunal – fixed price risk analysis – pages 2, 6 & 7.
Brief history of Guideline Hourly rates used as a starting point for assessment of solicitors costs and how they have been set
Historically the hourly rate covered the cost of the solicitor (33.3%), the office overheads (33.3%) and a profit element (33.3%). More recently it has become much more a question of what the market will pay, or sometimes what the market will bear.
List of guideline hourly rates 1999-2010 split by Bands of Location, type of court, grades of fee earner, and length of hearing for counsel.
The LSC pays a range of fees for criminal work (pages 4-6).
Mention of best value tendering etc – which the bar (page 2).
Equates low cost with poor value in terms of the overriding public interest – Page 5.
Once they have completed their first stage of academic training (the ILEX Level 3 Professional Diploma in Law and Practice course), employers (on a court assessment of costs) can charge Trainee Legal Executives fee-earning time up to
Fees for various litigation funding models in different countries summarised (page 27 onwards)
Fees will vary by individual circumstances, experience and knowledge of your solicitor, the type of advice.
Report covers fixed fees for legal aid work (page 7). Report explains how this fee level was first set (page 8). Further explanation of fixed fees for legal aid (page 40 onwards).
Report into PI market:
Reports on large corporates demands for value billing:
Value billing can be defined in different ways in the legal context. The basic idea is that a firm prices its services based on an understanding of the client’s goals and perceived value of reaching those goals. The usual result is a predefined fee for a specified legal service.
value billing ensures that legal work is performed and staffed efficiently. A firm can benefit from value billing if it can complete work under budget. There are, of course, risks and consequences for overworking a matter. As a result, firms are encouraged to operate with both eyes on operational efficiency.
The prevailing hourly billing method, under which law firms charge for “actual” time expended on a matter, has proved too unpredictable for corporate budgetary frameworks.
Value billing ensures that legal work is performed and staffed efficiently. A firm can benefit from value billing if it can complete work under budget. There are, of course, risks and consequences for overworking a matter. As a result, firms are encouraged to operate with both eyes on operational efficiency.
In relation to survey, percentage rates for conditional fees discussed (page 42). Notional hourly rates for contingency fees discussed (page 47). Report indicates that DBCFs are less profitably than hourly rate work (page 51).
Table 60 How lawyers fees are set by country – page 131
Discussion of incentives for experts in delivering credence goods – where consumers are never sure how much of the good they need. Experts incentives are determined by the interplay of prices capacity and size of their client base. Pages 106-109
For Personal Injury (PI) and Clinical Negligence (CN) cases, the hourly rates charged by defendants