Jaffar Shah is a litigation solicitor at Deo Volente Solicitors.
The debate surrounding litigation fees is one that has been ongoing for quite some time, with arguments put forward for various billing arrangements, which a client can avail him or herself to. Whilst fee arrangements such as conditional fee agreements, contingency fee agreements, and damage based agreements have proved to be extremely popular with clients, the “fixed fee versus hourly rate” debate has polarised opinions on both sides of the legal fence.
Pursuing litigation can be a costly exercise, and unless you are certain or believe that with the necessary evidence your position is strong, litigation can become a risky endeavor.
With that in mind, clients often have to balance whether their pursuit of justice will be outweighed by the potential risk of legal expenses being incurred which will not be recoverable if the outcome is unsuccessful.
This has led clients to make commercial decisions to use cheaper law firms and thus potentially compromise on quality, or to drop litigation altogether.
In order to combat this, law firms have adapted to provide alternative billing arrangements that are more appealing to clients.
A client may be minded to instruct a solicitor on a fixed fee agreement so that there is certainty in terms of the actual fee that they will pay and the service that will be provided. In this age of competition over collaboration, clients have exploited the competitive market conditions to engage in negotiation concerning fee reduction to ensure they receive a “good deal”.
Fixed fees, especially in litigation can also be agreed in stages from initial contact to resolution. Whilst success is not guaranteed, a client has the security of being able to budget for their legal fees and make an informed decision at the end of each agreed stage as to whether they wish to continue with the legal action.
The advantages for fixed fee agreements are as follows;
- Certainty of fees as costs are kept under control;
- Ability to make an informed decision at key stages (if agreed) as to whether you wish to continue;
- Competitive method of payment, potential saving on fees.
With the unpredictability of litigation, hourly rates most certainly give a solicitor the opportunity to work to what may be argued at a higher standard. This is due to the fact that they do not have to consider the potential situation of working more for a less fee which affects the profitability of the firm and ultimately, its ability to compete in the legal field.
Whilst efficiency is key to profitability, hourly rates usually give the impression to a client to have the peace of mind that quality of work and advice will not be compromised. In difficult litigation, even with an experienced solicitor it sometimes becomes difficult to predict an estimate of costs and thus the concept of a fixed fee is not entertained by the “heavyweight” firms.
The advantages of hourly rate agreements are as follows:
- Complete breakdown of costs and understanding of the work done and charged for;
- Opportunity to evaluate the time spent and costs charged for specific work;
- The peace of mind that quality of service will not be compromised.
Litigation is a results-orientated business. It requires meticulous attention to detail, going above and beyond a simple “form filling exercise”. A good solicitor will be able to discuss the differing fee arrangements together with identifying the most suitable fee arrangement for a client’s legal matter.
Here at Deo Volente Solicitors, we ensure that our client’s interests are priority, and that quality of service is not compromised.
To discuss your legal matter and the fee arrangements that we can offer you, please do not hesitate to contact our litigation department.