Our Fair Charging Policy

Ian Walker - Our Fair Charging PolicyLegal service are expensive, but making bad decisions through not getting good advice  or any advice at all can be very expensive.

People seek legal advice on family issues at times of crisis and distress. Decisions about advice or not, and who from are often made quickly and a free half an hour can be tempting.

We explain below how we always aim to charge fairly. We also try to explain how legal pricing can work in a way which encourages clients to pay more than they need to.

We have all been into a supermarket and have been lured to buy more than we need by special offers such as:  buy one get one free or 3 for 2.

We have all been encouraged by special offers or carefully placed product displays to purchase more expensive items than we wanted/needed.

Professional services are also liable to “smart pricing” as a way to encourage clients to pay more money.

Legal Pricing

The normal and well established method of charging for legal services is by hourly rate.

With charging by hourly rate clients only pay for what is done. However this way of charging can place more emphasis on actions rather than the expertise utilised. The way in which time is recorded doesn’t so easily capture time spent thinking about cases and applying expertise. The timesheet may not reflect the real value a client receives. This way of charging is not perfect but it is transparent.

Generally charging by hourly rates generally works, but we do sometimes have cases with solicitors who seem to take such an unconstructive or letter heavy approach that it does cause some anxiety.

Hourly Rates

Hourly rates can vary significantly and can be high. For example, the going rate for experienced partner level solicitors in Exeter and Taunton is generally between £250 -£300 per hour (not including VAT). Rates are less for smaller practices.

Historically solicitors routinely charged a fee that was a % of the transaction for property and probate work. This generated bills which were very often higher than using an hourly rate and didn’t always reflect the complexity of a job.

Solicitors also used to charge by reference to the size of a file and an estimation of the value of the case to a client.

The move to hourly charging came as electronic time recording became easier to use.

Clients are understandably increasingly cautious about hourly rates and potentially uncapped fees. There is a risk that they reward the inefficient. We would all probably prefer to instruct a builder who quoted a fee for the job, rather than leaving their charging open ended.

Giving costs estimates for legal work, and especially family law work is difficult. There can be a lot of more unpredictability about how a case will develop.

Problems/increased work can arise from the impact of emotional issues; the attitude/co-operation of the other party; the approach of their representative; or if they have no representative, a lack of understanding about how cases should be progressed. This means that cost estimates often need to be vague.

Smart Pricing of Legal Services

To meet clients demand for certainty on costs, many solicitors are now adopting a smart pricing policy. Smart legal pricing is naturally smarter for the lawyer than for the client.  Our Fair Charging Policy derives from Ian learning about smart pricing through a course about maximising law firm profitability.

How smart pricing works:

The client receives three quotes:

  1. Hourly rates. A traditional range of costs. For example: £15,000 – £20,000 for divorce financial proceedings. There is no cap. Costs could be higher or lower.
  2. Fixed Fee 1. A fee of say £25,000, all in, whatever goes wrong.
  3. Fixed Fee 2. A fee of say £30,000, same as Fixed Fee 1, but all the work will be done by a senior fee earner and they may even let you phone them up in the evening.

The idea is that most clients will choose Fixed Fee 1, and the solicitor will happily delegate work to junior team members.

The cheapest option will probably have worked out to be the hourly rate option. The client appreciates the choice and psychologically will be drawn to the middle option.

The myth of the Free Half Hour

This model of pricing works very well with a free half hour.

The client is drawn to the meeting on the promise of something for free.

The Solicitor takes their information. They will talk about process, but won’t want to give away advice. (half an hour isn’t long enough to properly understand a problem to enable good advice to be given anyway).

The purpose of the meeting for the solicitor is to get the client through the door and have an opportunity to empathise with the clients problem and reassure the client they can solve it.

The Solicitor will then contact the client after the meeting with their smart pricing proposal.

The client is then hopefully persuaded to pick the fixed fee or ideally the high fixed fee.

In the overall scheme of things, the initial half hour meeting wasn’t free, but was paid for again and again and again…

Smart Hourly Rates

A similar smart logic applies to hourly rates:

Suppose you are offered 3 hourly rates:

Solicitor A charges £220 per hour

Solicitor B charges £270 per hour

Solicitor C charges £300 per hour

With an important and difficult problem, the logic goes, the client will probably pick B or maybe C, because the charge rate suggests that the solicitor must be better because they can charge more. However it doesn’t follow that this is true. (for true expertise: look at the solicitors CV).

Some firms will want to charge the highest rate to assist them to be seen as the best. They think that this will assist them to attract clients prepared to pay for the best. Others will prefer to charge slightly less so that they can be perceived as being better value. (but only compared to the highest).

There is a kind of race to the top. The squeeze is on the solicitor trying to keep their charge accessible.

The advice to us from the charging expert was that we are losing work because we do not charge high enough hourly rates!

Ian charges £240 + VAT per hour. By this logic he should be charging £300+VAT per hour and then offering to do everything on a case on a high fixed fee.

This model of smart pricing with smart hourly rates is being increasingly adopted within the legal profession to achieve greater profit. It is smart pricing for the solicitors practice, but it is not smart purchasing by the client.

As providers of professional services, we don’t think that this “smart” approach is in our clients’ interests or that it is a fair way to charge.

Our Fair Charging Policy

We are professionals. We act in the best interests of our clients. We need to make a living but we are not seeking to make excess profit.

Our charging policy is as follows:

Initial Meetings

We do not offer these for free. We charge a modest fixed fee of £100 + VAT. We will give advice. Our initial meetings last for 1 hour.

Hourly Rates

We continue to work mainly on an hourly rate basis.

We charge reasonable rates which are worked out so that we can meet our overheads and pay our team at a reasonable level.

We invest in training and legal knowledge (including the best family law library and practice support service available) but we keep our overheads as low as possible by using cloud technology and business centres. We aim to make a reasonable profit.

Cost estimates

We try to be as realistic as we can. We will offer only 2 options:

  1. Hourly Rates
  2. Fixed Fee

The fixed fee will be higher to take into account that things may go wrong in some way, but we will not offer a second higher fixed fee to make the offer more attractive. Fixed fees can be a good idea, but are not for everyone. The hourly rates should normally be cheaper.

Service Levels

We aim to offer all of our clients good service. We want to get a good outcome for all of our clients. We will marshal our resources and work as a team to do this. We won’t penalise the majority of our clients because someone is able to afford to pay more.

Openness about Charging

We are transparent about how we charge. We publish our charges on our website. It is very unusual for lawyers to do this.

Why only charge a fair rate?

We wouldn’t want to charge in any way that we do not think of as fair.

We are skilled professionals who value what we do and we want to do a good job for our clients.

We are hardworking and conscientious experts and we are committed to getting the best outcome for all of our clients.

We want our skills to be accessible..

If you think we should be charging higher hourly rates…

If, after reading our CVs you want to instruct us, but are worried that we are not charging enough, then please do not let us stop you.

We will all be happy to charge you at a higher hourly rate or a through a premium fixed fee, but we will donate the additional money that you pay to the children’s charity UNICEF.