Money taboo fades as lawyers' fees go on trial

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The Independent Online
OVER THE past year, solicitors' fees have gone through an important barrier: pounds 100 an hour is now the going rate in much of the country for consulting senior solicitors, writes Neasa MacErlean.

Rates vary substantially. Individual (rather than corporate) clients now pay between pounds 55 and pounds 275 an hour to see the partners of law firms, according to the latest survey by Chambers & Partners. The time of more junior professional staff is cheaper, ranging from pounds 40 to pounds 135.

While many law firms believe these prices are fairly low, their clients often regard the final bill as exorbitant. Last year more than 3,000 people lodged formal complaints about bills with the Law Society. About a third had these demands reduced.

Now solicitors are trying to nip fee disputes in the bud by being open about their charges. Robert Lee of Trump & Partners in Bristol said: 'There used to be a reluctance on both the solicitor's and the client's side to mention the sordid question of money. But as people became more switched on in terms of consumerism, that was an attitude which had to go.'

Trumps now sends out an engagement letter to each of its clients, setting out the terms and conditions of the relationship, the way in which the work will be done, and either a fee quotation or an explanation of how charges will be calculated.

This practice is being strongly encouraged by the Law Society. Last year the society stopped short of forcing solicitors to discuss fees openly with clients, but it is encouraging them to do so.

It is requiring firms to set up an in-house complaints procedure. Increasingly, the firm itself will be the first port of call for a complaint about fees, but the Law Society has the power to reduce excessive bills. Its disciplinary wing, the Solicitors Complaints Bureau, has also been given new powers to award compensation to clients for 'inadequate professional services'.

In disputes involving large amounts, running into thousands of pounds, it might be worth taking a grievance to the High Court, though that route involves incurring even more legal expenses.

Most users of law firms will probably never think seriously about making a complaint about fees. In future, they should have less need to do so. A quiet revolution has been taking place over the past few years, spreading the the practice of the flat fee, as charged for conveyancing, to some wills and probate services. It will be applied eventually to other areas of legal business.

The flat fee can vary dramatically from town to town. First-time buyers can have conveyancing done for as little as pounds 100 in Hull, a city where competition became so intense that some solicitors took to advertising on posters on the buses.

Leon Lurie, of a Hull-based law firm, Stamps, said: 'People do negotiate what the price will be, and they will ring to check that price with other firms.'

In other areas, law firms have gone out of business because they pitched their conveyancing flat fees too low.

One certain consequence of the movement towards flat fees will be the development of highly specialised firms. Stamps, for example, believes that it can offer competitive rates because it handles a high volume of transactions.

It specialises only in conveyancing and financial services. It is also in the vanguard of another development in the legal world, the growth of national networks. One of about 60 members of the National Conveyancing Network, it adheres to a set of quality standards, including user-friendly billing.

National Conveyancing's chief competitor, the Conquest Group, aims to have more than 700 lay firm members by 1995. Both networks are trying to take the sting out of fees by persuading building societies and other lenders to extend their mortgage loans to cover legal costs.

Many firms still persist in refusing to discuss fees openly and not giving an explanation or itemisation of their final charges. Nowadays, though, clients can either force them to do so or can shop around.

----------------------------------------------------------------- Solicitors' fees for private clients* Average rates per hour ( pounds ) ----------------------------------------------------------------- Region Partners Asst sol'rs ----------------------------------------------------------------- London 165 105 South-east 105 75 Midlands 100 75 South-west 90 73 East Anglia 92 71 North-west 90 65 North-east 90 63 Wales 90 70 ----------------------------------------------------------------- *Includes personal tax planning, trust work, probate, will-drafting. Excludes conveyancing. ----------------------------------------------------------------- Source: Chambers & Partners Directory 1992/3 -----------------------------------------------------------------