The "Dirty Word" - Solicitors fees & what you get for your money.
Legal services aren’t cheap, and with good reason. You wouldn’t want a cheap climbing harness, or child safety seat for your car, so, similarly, you want a good solicitor when you need one. The vast array of different fee structures and hourly rates can be confusing and does a higher price mean you will get a better service? How do you know what’s good value and what isn’t? OK. The UK legal industry is heavily regulated and you are well protected, as a consumer, when it comes to costs. Solicitors should provide ‘clear and accurate information’ according to the Law Society:
OK. The UK legal industry is heavily regulated and you are well protected, as a consumer, when it comes to costs. Solicitors should provide ‘clear and accurate information’ according to the Law Society:
" Clients should not be led to believe that costs are likely to be less than they will be and headline prices should be presented in a manner that enables 'like for like' comparisons in terms of cost information, with breakdowns of charges where appropriate. "
Broadly, if you are paying for your solicitor’s time (i.e. not a legal aid funded case or pro-bono work) then there are two fee structures fixed fee and hourly fees.
Fixed Fees:
Fixed fees are often given for simple transactions, or where a practice handles large numbers of almost identical transactions. From a solicitor’s point of view it is a bit of hedging, for every case where they’ve slightly undercharged there will be ones where it’s slightly over.Whether you get good value out of that situation depends on whether your transaction is straightforward or not.
In essence a Fixed Fee transaction should get you from A to B. Fixed fee transactions do give you certainty of cost and allow you to budget but make sure that you know exactly which costs are included and which aren’t.
Disbursements:
Disbursements are often not included in fixed fees and are an extra cost. These are costs incurred by the solicitor such a Land Registry charges, bank transfer fees, the cost of doing searches and/or producing plans.
These costs are passed on to you ‘as is’, and should not be added to by the solicitor. Usually the solicitor will be able to give you an estimate of these costs in your quote such as:
- Fixed fee element: £750.00 +VAT
- Disbursements: £300.00
Hourly Rate
For more complicated transactions most solicitors will charge by the hour. The initial rate may seem steep but you’re paying for their knowledge, experience, a high level of professional indemnity insurance and their overheads too.
The hourly rate is broken down into 10 blocks of 6 minutes each for billing purposes. The hourly rate applies to the time the solicitor spends on your case until it’s finished or at an agreed stage. This has the advantage over a Fixed Fee case as you are only paying for the work actually done, but there are no certainties of costs here.
The UK government has produced the following table for reference when it comes to UK solicitors fees for Litigation work. Although it is not applicable for all areas of law, and certainly not specialist areas, it does provide a good guide.
| Grade | London 1 | London 2 | London 3 | National 1 | National 1 | National 1 |
|---|---|---|---|---|---|---|
| Grade A Solicitors or Fellow of CILEX over 8 years’ qualified experience. | £409.00 | £317.00 | £229.00/ £267.00 | £217.00 | £201.00 | £201.00 |
| Grade B Solicitors or Legal Executives (CILEX) over 4 years’ qualified experience and Costs Lawyers who are suitably qualified, and subject to regulation, depending on the complexity of the work | £296.00 | £242.00 | £172.00/ £299.00 | £192.00 | £177.00 | £177.00 |
| Grade C Other qualified Solicitors or Legal Executive and Costs Lawyers who are suitably qualified, and subject to regulation, depending on the complexity of the work | £226.00 | £196.00 | £165.00 | £161.00 | £146.00 | £146.00 |
| Grade D Trainee Solicitors, paralegals or equivalent | £138.00 | £126.00 | £121.00 | £118.00 | £111.00 | £111.00 |
What does an hour get me?
I think the perception of value for money, when it comes to legal fees, stems from an understanding (or lack thereof) of what a solicitor actually does all day. You should get an itemised bill which should include any of the following (not exhaustive)
- Drafting of legal documents
- Researching – anything from current case law and precedents to market rents
- Drafting letters and /or emails responding to queries from the opposing solicitor
- Typing – some solicitors still dictate their emails and letters so you may also have to pay for the secretary who types these up
- Telephone calls
- Client Meetings
How to get the best out of an hourly rate:
We do a lot of hourly based work for our clients and have found that the following rally helps:
- Get an estimate up front. The estimate is just that and, although it won’t cover all eventualities, it will allow you to compare firms and should give you a good idea of what you’re letting yourself in for.
- Set a cap. We often set a ceiling, say £1500, and if/when we get to this amount we would stop and only carry on once we’d discussed it with the client.
- Arrange for a monthly bill. This stops any ‘heart attack’ moments at the end, and allows you to effectively pay instalments or bite size chunks. It’s also a great way of keeping abreast of progress
- Ask questions. Any solicitor worth their salt will be able to explain your bill to you.
- Don’t assume cheap = best value. If you want a quality service it may be better to pay a little more per hour on the assumption that a more qualified and experienced solicitor will be able to do more for you in that time
You can find out more at the Government's page.
Or you can download the Legal Ombudsman’s useful leaflet.