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Legal costs and fees – What does a client want?

A new legal world

Clients demands and expectations in relation to legal costs and fees are changing, are you changing with them?

There have been significant changes in the legal profession over the last few years. There has been an increase in firms moving away from the traditional Partner structure and an increase in the number of law firms adopting alternative structures, with more consultancies and virtual firms.

More fee earners are working from home, and hybrid working has changed people’s perception of what is possible.

Clients’ expectations have changed.

So what does this mean for law firms?

Funding and fee pressures

What are the challenges for legal costs and fees?

Funding options have decreased with the erosion of legal aid.

There have been changes to Conditional Fee Agreements. The success fee cannot be recovered from a Defendant and is paid by the client.

The introduction of fixed fees has reduced the amount that law firms recover in personal injury cases.

Challenges to lawyers’ fees by their clients have increased.

When you add the proposed extension to the fixed fee scheme in litigation, there are a lot of pressures on a lawyer’s fees and a lot of uncertain times ahead.

There is pressure from social media and clients for a greater variety of fixed fee services.

All the pressures have created a need for firms to review what they charge and how they do it.

It is not enough to simply do some work and bill your client, without being accountable for how that time is spent.

The importance of fees in the solicitor/client relationship.

It is essential to have a strong relationship with your client, and your fees play a vital role in establishing and maintaining that relationship.

Your client does not want to receive a large, unexpected bill from their solicitor.

Legal Costs – What does a client want?

1. A clear understanding of the fees/costs before the work begins.

Your client wants to know what work is going to be done, how the costs are calculated, the amount they are likely to pay, and when they will have to pay.

It can help to provide details of the scope of the work. You should include information about assumptions that have been made. You can also include details of any work not included in the fee.

2 Estimates to be accurate, and fixed fees maintained.

Defining the scope of the work at the outset and having a clear plan of the work required will help you provide accurate estimates and fixed fees.

3. A firm that can keep costs under control once the work commences.

Your client wants to trust that the price quoted is accurate. If changes to the case occur, they want to be informed as soon as possible.

A system needs to be in place to identify any changes or problems. Early identification of a problem can help resolve it quickly. Changes can be then be made to the work or the scope to keep the costs on track.

4. To be kept up to date with the costs position.

Your client wants regular updates about the costs.

They want to be informed about any problems at an early stage and be advised if further work needs to be done.

They need to be advised of any costs increases as soon as possible.

Giving a client the best costs information at the right time can help your relationship and reduce the likelihood of challenges to your fees.