To think that lawyers should not charge by the hour?

[DMAGA]

I have recently been represented in an unfair dismissal case by a firm of lawyers who told me that they could help me and then did f* all. The partner charged £400 per hour, his assistant £250 per hour, the consultant £350 per hour and then I was charged for all of them having 'discussions' about my case. They ran up a bill of £200k without achieving anything and, because my case was in the Employment Tribunal, the Tribunal would not have awarded me my costs even if the matter had gone ahead to trial and i had won (which would have cost me another £300k). In the end, I sacked them and reached a satisfactory agreement with my employer on my own, but all of my settlement monies have been spent on paying my lawyers. What other jobs are remunerated by the hour which means, in effect, the more inefficient you are and the longer you take to do the job, the more you will get paid. It's bonkers, isn't it? Does anyone actually like lawyers? Don't they just thrive on other people's misfortunes?

...in the interests of completeness, my charge out rate is £130 an hour. Much of my work is fixed fee (e.g. will drafting, preparing trust documents) but estate administration, contentious probate and other work is charged by the hour.

Very few lawyers bill for all the hours spent. I record a lot more hours than I actually ever recover the fees for. Things take longer than expected, the client needs to be chased, they ask questions etc. I also have to do some admin that isn't chargeable, and sometimes have to do research if I am unsure of the answer which I also cannot charge for if it is something that I really should have known.

It is a misconception that if a lawyer is in the office from 9am to 6pm that they will be able to charge for 9 hours' worth of fees. IME 9am to 6pm would result in somewhere around 6 chargeable hours, taking into account admin, shuffling files around, speaking to your secretary about work needing doing etc.

realhousewife - errrr, insurance? Do you know how much one copy of the White Book costs? Or how much a one year subscription to WestLaw is?

Every post you have made has been full of structural holes. Please research before running your mouth.

Voluntary number quoting if the exact figures are that important - £36k as a partner and high court advocate in central London.

No personal hourly rate as legal aid work is fixed fee. If you do work out an average hourly rate based on a bog-standard case where not too much goes wrong, it will be something in the region of £10-£20 per hour for the firm.

Oh the GP's earn bollocks again. The average GP salary is not £150k + , there are GP partners who earn this level but they usually have to pay other salaries , cost out of this. Some have played the system and with private work do earn high salaries but many many more aren't partners and are salaried more likely to be earning around the £50k level. It is a commonly misrepresented fact. I am not a GP but my DH is a very involved with the BMA at committee level and therefore I have been immersed in the actual facts and figures of medical earnings, hours etc for years.
Hourly rates for most professionals are usually misinterpreted as earnings. Professionals have overheads such as support staff, premises, IT, professional memberships (often obligatory if you are to practice legally) , training(most professionals have an obligation to continual professional development, in other words training so that they remain current), insurances (professional indemnity, public liability etc) and many other overheads. Therefore these hourly rates don't always translate into high salaries... Sometimes they do but you may find professionals have to pay memberships, insurances etc themselves and therefore the salary disappears into these things. Lastly professionals generally have to train for a long and usually expensive period of time, this needs to be paid for some how.

eralhousewife -primarily paid by the state? I'm sorry, but that is nonsense. A tiny percentage of lawyers are legal aid. In pure numbers, most will be paid by businesses, with individuals the next chunk.

Sorry, one handed typing...

''I suspect there is a massive profit going into someone's profit, and I am perfectly prepared to believe that it's not going into the pockets of the solicitors posting on here. But where is it going? It doesn't cost that much to run a couple of phones, a secretary and an office suite, surely.

And this ties nicely in with GPs. What do GPs and lawyers have in common? They are primarily paid by the State, and have not until very recently been scrutinised in terms of what value for money they actually provide for the taxpayer.''

If ONLY that's all a firm needed to run. Where is the secretary going to sit? How are they going to keep track of time? Who is paying to store all those documents for the legislative period required? What about all the legal libraries they they need to keep up to date and Case Management systems, Practice Management Systems, email systems, docs management systems, Time Entry and Cost Capture systems? What about all the contracts and documents that need to be typed up and captured or the copies that need sending out? What about the costs of IT departments, finance departments, credit control, HR departments, what about the costs of training your staff and ensuring their qualifications are up to date ... oh my... the list is endless.

That hourly rate covers all this and more. It does not go into the lawyers back pockets.

And working as I do for both Magic Circle and High Street lawyers I would love to know why you thiink the state pays for it all. The Magic Circle Firm lawyers (the BIG BUCKS lawyers, in theory) are mainly corporate lawyers and Corporations pay them!!
Legal Aid is not generally carried out by these guys. So you are totally wrong. The lawyers you/they/we (insert as required) all love to hate are not generally paid by the state at all ... The ones that are paid by the state are battling to make ends meet and closing down. They also have a additional issue of a MAJOR change in the law which allows non lawyers to own law firms - so really this is a profession under some very serious strain at the moment.

Can someone explain the term Magic Circle to me?

First of all, as others have said, you should have had an engagement letter before work started. I am an accountant and our billing system is similiar. The more time we have to spend on a client the more it costs them. If you knew costs were an issue you should have been more clear about this and asked more questions about estimated costs. It also would have been an idea to get quotes from other law firms.

For others who think lawyers are overcharging, I think the biggest rip off is the VAT charged for these essential services. Of the 200k bill the legal firm is only getting 160k. From that they need to pay very high council taxes, payroll taxes and taxes on utilities. I am sure there are other taxes but I think my point is made that the bonkers part of your story is how your bill was inflated by all the taxes. Also, just as you double an estimate that a builder gives you, it would have been prudent to do the same with the estimate provided by the law firm.

While I don't like lawyers the Western world is very fortunate that so many people have access to legal help. In many other countries you wouldn't have even been able to take your former employers to a tribunial. Count your lucky stars that you were able to neigotiate a settlement that covered your costs.

Magic Circle firms comprise of the 5 biggest law firms in the UK (and 4 of the biggest 7 in the World). These are not just UK firms but large Global Corporate Law Firms with offices in 20 to 30 countries with Head Offices in London. They deal, predominantly, with huge Corporations and Banks and do very little Legal Aid type work .... they don't need it... they earn more than enough from the capatalists of this world :-), instead they do a LOT of pro-bono work.

Thank you

My dh earns £45 grand a year before tax. He leaves for work at 6am-40 min commute-and doesnt get home til 8pm-some times later. If he is lucky he gets away early on a friday-and by early I mean 5pm. He is also on call at weekends for criminal emergencies-this can mean phone calls from the police or clients at all hours of the day and night.

He earns an ok wage but we are by no means rich!-never had a foreign holiday,drive a low range car,live in an ex council house etc.

As I said before I wish he was a so-called fat cat lawyer!

Quite honestly my dh is hanging on to his job by the skin of his teeth-his firm has laid off 4 lawyers in the past year. That means my dh work load has grestly increased,he is working even longer hours to try and keep bringing in business and hasnt had a pay rise in 5 years-its hardly the life of riley is it!?

What sort of law firm did you use? Even a very large national law firm doesn't charge £400 an hour for a partner doing employment work. You must have gone to an expensive city firm?

I am not going to say what I earn, at least not without namechanging, as I have already said I work as an equity partner in a top 50 firm, probably one that is not dissimilar to the firm you are complaining about. I do earn what by a lot of peoples standards is a lot. I accept that and I actually don't think I "deserve" it compared to say a nurse or a teacher. I think I do deserve it compared to a banker, an accountant, or many other business roles. Most of the people I act for earn far more than me. That's life.

I will however say that the minimum non -secretarial office costs per partner at my firm are in the region of £85-90,000 per annum, assuming that the partner works outside London which are the costs you put down as a "couple of secretaries and the phones". They are a lot more for inside London. I then contibute to part of the cost of a PA, so add another £15k to that figure (again for outside London) and you will see I have to earn over £100k just to start to break even, assuming that everyone will in fact pay their fees when the bills are sent out which they don't so I don't pay interest etc on my costs, or take less slary/profit myself - which I usually do to help cashflow. Also those figures assume that I do all the work myself and don't employ other lawyers which we do so that not everyone pays partner rate all the time. There are then the costs of training (each solicitor costs about £250,000 to train from the point they leave law school to the point they are qualified). My rate varies, as my fee structures vary depending on the nature of the job. Sometimes I charge £200 per hour, sometimes £350 per hour. I have not yet charged £400 per hour

I am not paid by the state, although I do have come charities on my books, but mainly I don't charge them, I am paid by companies, to defend the type of claim I believe you will have brought. I look forward to the day when claimiants have to pay to lodge claims, as they are for other claims, as that may help people decide how much they really want to fight. In saying that I suspect I am talking myself out of a job.

The sad thing is I suspect you had a good claim, from what you have posted, and I also suspect you were let down and that the firm didn't handle the fees appropriately at all points. I also suspect you should never have spent the amount you did. None of that makes me actually think it would have worked out that differently if you could have found a firm who would have taken on a presumably complex claim on a fixed fee basis, and I also suspect that the claim was probably too complex for no-win no fee (and the usually required after the event insurance which goes with that). It also doesn't explain your vitriol for a whole profession, or your lack of understanding for those lawyers who are far more deserving than I am.

Coming back to your premise and the information you have posted, I suspect that charging by the hour was therefore appropriate, and despite seeing great changes in the legal profession and how we charge for what we do, I am reminded that we only went to hourly charges as clients preferred it as they believed it to be more transparent.

Good post hilda

You didn't just ask your original AIBU question about whether lawyers should charge by the hour - you went on to be abusive about lawyers in general and to call them "shallow and materialistic". Nice. What the bloody hell did you expect, warm affirmation and a round of applause? Yes, I am a lawyer, yes my services are charged out by my firm by the hour (£275, I believe - nowt to do with me, it's my firm's charging structure) - but I am neither shallow nor materialistic. But having been written off by you, I'm not terribly inclined to offer you much sympathy for your position or to engage with your original question (if that's actually what you wanted, which I doubt).

Ime the hourly rate of a barrister appears to be about half that of a similarly qualified solicitor. I assume the difference is mainly down to overheads.

Depends on the barrister.

DMAGA Why do baby barrister and others keep asking me how much I earn and what I do etc? Why does this make a difference?

It does as it affects your final award and to be honest, you are slating the legal profession which has provided you with a service for earning "too much" money and "taking advantage" of you. You appear to be lacking on case facts (which you CAN disclose after settlement unless there is a confidentiality agreement attached to it and from what little facts you have provied, i assume that this is not the case). So much so, that I think you are telling your own side of the story rather than giving an idea to us as to what correspondence you actually had with your lawyers hence attempting to stir or paint a biased picture of facts.

And FWIW realhousewifeI think you should get a grip and read what others have posted on this thread with regards to figures. You seem to be ignoring what many others have been telling you i.e. the £400 hourly rate is not the take home salary of the lawyer earning it. They have numerous overheads to pay (particularly support staff wages, NI contributions, etc.) and this fee would only be for a partner anyway (of a large firm), a select few within the profession as a whole. The rest of the profession only get a fraction of what they earn, typically £25-£45k outside of London.

Anyway, if you both want to bitch about lawyers in general, I suggest that you qualify yourself. You too could earn millions of pounds fleecing the unsuspecting taxpayer mercilessly. It only takes a month at university, £200 in tuition fees (including LPC), a training contract for someone of your apparent astuteness should snap up a TC at a top firm in seconds and be a partner within 3 weeks charging a minimum of £400 an hour.

GET A GRIP. PLEASE.

Calvert, you are making a number of assumptions here. I cannot provide more information about the original matter because of duties of confidentiality owed to both the firm of solicitors involved and the original Respondent.
FYI, I think I am uniquely well qualified to have a view on this. The ABS is on its way and some lawyers really need to 'wake up and smell the coffee!'

"The ABS is on its way and some lawyers really need to 'wake up and smell the coffee!'"

So does the general public if they think ABS will result in better service and/or cheaper fees...

As it happens, I woke up a long time ago and am currently starting my own business selling wedding dresses and training to do make-up and spray tanning. It is worth noting that if I spent 30 hours a week spray tanning I would earn substantially more than I do working 30 hours a week as a lawyer - and that's after a one day training course!

The law is only really lucrative for those in big firms. Those in big firms tend to have to work long hours under considerable stress. It wasn't for me.

The big City firms are under no threat whatsoever from ABS. The lawyers who stand to suffer are those already doing low-paid high-volume work.

Thanks babybarrister for explaining that your costs come to around 1/3 of your income.

Lots of solicitors saying 'I only earn xxK, it's not my fault the charge out rate is so high' doesn't help explain to me why the charge out rates is so high.

If you are earning 40K a year, the charge out rate is £300 and hour, you do 25 hours a week, your firm is taking a profit of £5000 per week and you could be paying your costs (assuming they are one third) off within 8 weeks of work.

Please don't use the word 'bitch' in reference to my posts. It's insulting and immature. I'm not bitching.

And what's ABS?