Understanding Solicitors' Charges

 

 

How and how much solicitors charge for their services in the UK is not well understood by their clients although the Law Society of England & Wales does have clear rules about how it should be done. One common misconception, for instance, is that solicitors hold on to clients' money for as long as possible in order to earn (and keep) the interest on that money. In fact, this does not happen (unless it has been expressly agreed in advance with the client) because interest on clients' money belongs to the client as much as the money itself. The Law Society has strict rules about it and every solicitor is aware of them. Nevertheless, the fact that this notion is so widespread amongst the public is an indication of how bad solicitors sometimes are at explaining their charges to clients.

 

It has to be said that solicitors are often their own worst enemy in this respect because the subject of solicitors' charges in England (which they refer to by the arcane word "costs") is bedevilled by the use of unnecessarily complicated words and charging methods. This is a pity because the actual rules which govern solicitors' charges to their clients are designed to be fair and transparent. For instance, secret commissions, which are commonplace in some professions and of which the client is absolutely unaware, are not permitted to solicitors and all charges and commissions received from third parties must be fully disclosed. How many people, for example, have found to their cost that the endowment policies which they have taken out to secure repayment of their mortgages have little or no surrender value in the policy's early years because the premiums have gone towards the payment of the salesman's commission?

 

Nevertheless, many clients are still confused about how much they will be charged by their solicitor for a given piece of work and it has to be said that they often are right to be confused. The golden rule if you are not sure is to ask. It is surprising how many clients do not ask. Although the precise basis on which a client is to be charged should be given in writing at the outset this sometimes does not happen and clients rightly feel aggrieved if they are ambushed by an unexpectedly large bill at the end. Always ask on what basis you will be charged and be sure to ask if there is anything about it which is unclear.

 

In some cases, (buying or selling a house or flat is the most common) a solicitor will agree a fixed fee in advance and this usually presents few problems.The cost of obtaining a divorce is normally another such example. However, even in this case it is sensible to be quite clear about what is and what is not included in the fixed fee. So called "disbursements" usually are not included. In most cases this simply means costs such as Land Registry fees, local search fees etc which the solicitor has to pay to third parties on behalf of the client and for which he will seek to be re-imbursed. These do not usually cause a problem and they will be the same from solicitor to solicitor. However, there are still some solicitors who charge for such things as photocopying or postage etc under this heading and it is as well to be aware of it.

 

Incidentally, it is also worth while bearing in mind that you should choose horses for courses. It would be silly to pay a partner in a large City of London firm to buy or sell your house (even if he were prepared to do it) because the cost would be quite disproportionate. A High Street solicitor will usually be much more competitive for this type of work. Conversely, if you need specialist advice on, say, corporate demergers you will almost certainly need to engage a specialist or specialists and pay correspondingly more for it.

 

What is probably less well realised is that even within quite small firms there can be a range of charging levels depending on the person who is dealing with your work. Typically, this will range from a partner at the top end of the scale through to an assistant solicitor or perhaps a legal executive in the middle to a legal clerk at the bottom. It is always worth asking if a firm has different charging levels depending on who carries out the work and to consider whether the work you want done can be done more economically and effectively by, say, a legal executive as opposed to a partner.

 

For work which is not carried out on a fixed fee basis, (litigation is generally one such example because it cannot usually be foreseen how long a given case might last), solicitors normally charge for each in-coming and out-going letter, for telephone calls and for time otherwise spent (for example, interviewing the client, drafting documents etc). These charges vary quite considerably from solicitor to solicitor and it is vitally important that the client understands them in order to make best use of his solicitor's time and to keep some control over costs. For an example of how this works (and how the costs are calculated is by no means self-evident unless you choose to ask) take a look at an old example of the Legal Aid Board's scale of costs applicable in Family Matters. (It is worth mentioning that this is not in fact the current scale and the figures are used for illustration purposes only). Understanding how this works will give you an idea of how solicitors' charges as calculated (and why they sometimes seem to be more than the client had expected).

 

It is quite possible to ask to be informed if costs exceed a given point. Sometimes, too, it may be possible for the client to act in person for some matters and only to seek specific legal advice as and when he needs it.

 

In the event that you are unhappy with your solicitor's bill you should in the first instance take it up with your solicitor. He is obliged to give you a detailed breakdown of how the bill is made up and this may be sufficient to resolve matters.

 

If it is not, you do have the right to have the bill scrutinised by a third party and the result of that may be that the size of the bill is reduced. Your solicitor will explain the procedures by which you may do this. In the case of contentious issues (that is, those involving court proceedings) the process usually adopted is called "assessment" and in the case of non-contentious matters the client may have a right to obtain an adjudication from the Law Society confirming that the bill is fair and reasonable or otherwise. It has to be said that there is a cost to both procedures and who will pay those costs rather depends on whether the original bill was deemed fair and reasonable or not but it is certainly the case that there are procedures by which a solicitor's bill can be questioned. It is usually better, though, to make quite sure where you stand at the outset and agree a proper framework of how you will be charged.

 

There is no reason why solicitors' charges should be a subject of such mystery but the truth of the matter is that they often are. Understanding them is vital if a client wants to make the best use of his solicitor's time and if the solicitor/client relationship is to be built on a firm foundation. There is no long term benefit to either solicitor or client if at the end of a given piece of work the client is left feeling dissatisfied because of the costs. It is in both the solicitor's interest and that of his client that solicitors' charges are fair, reasonable, comprehensible and (in the last resort) subject to independent review.