find the latest legal job
Senior Associate - Competition, Policy & Regulatory
Category: Other | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Work with a well regarded Partner · Sydney CBD
View details
Commercial Litigation Senior Associate
Category: Litigation and Dispute Resolution | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Lawyers Weekly Australia Partner of the Year 2016, Insolvency
View details
MULTIPLEX Regional Legal Counsel (Vic) | 7 to 10 years + PQE
Category: Generalists - In House | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Career defining in-house role · Tier One international contractor
View details
Junior Lawyer - Personal Injury Law
Category: Personal Injury Law | Location: Parramatta & Western Suburbs Sydney NSW
· Highly specialized practice · Challenging role with great opportunities
View details
IR Advisor/Member Advocate
Category: Industrial Relations and Employment Law | Location: St Leonards NSW 2065
· Permanent (0.8-1.0 FTE) role in a developing team
View details
Legal fees report far from conclusive

Legal fees report far from conclusive

AS NEW South Wales is spearheading moves to impose heavy penalties on lawyers who don’t comply with fee disclosure, some are raising questions about the validity of a report undertaken by the…

AS NEW South Wales is spearheading moves to impose heavy penalties on lawyers who don’t comply with fee disclosure, some are raising questions about the validity of a report undertaken by the state’s Attorney-General.

Legal fees may be more heavily regulated nationally if NSW Attorney-General Bob Debus can enforce the recommendations of the NSW Legal Fees Panel Report, as discussed at the Standing Committee of Attorneys-General (SCAG) meeting last week.

In a Melbourne-based working party of all state and territory governments, the issue of how legal fees are charged was discussed as part of efforts to improve national model laws.

The NSW report, which follows a two-year inquiry commissioned by Debus, was prompted by comments made by NSW Chief Justice James Spigelman, who called for an end to the “tyranny of the billable hour” in early 2004.

While NSW is leading the charge, a spokesperson from Debus’s office said that a resolution from the other states is still five to six weeks away.

But the validity of the report has been called into question. President of the ACT Law Society, Greg Walker, said that “a lot of the conclusions are based on anecdotal evidence, and a number of the more extreme recommendations were not the product of a majority vote on the panel — they were a two-all split”.

Walker said that considering model law legislation has only just been introduced in most jurisdictions, the Report was premature, and at this stage, it is too early to speculate how states outside NSW will react to its findings.

Yet Alan McArthur, managing partner of Minter Ellison’s Sydney office, told Lawyers Weekly the Report’s recommendations were of little concern to top-tier firms.

“Frankly, most of the larger firms really don’t see a lot of what’s being said as applying at all to the sophisticated clients we act for,” he said.

The Report claimed that time-based billing “distances lawyers from any understanding of the real market value of their services”. But at the top end of town, the market regulates which firms win tenders, and how the corresponding fees are calculated. This means it is the clients who “hold the ability, in many cases, to determine what the price is that they’re actually prepared to pay”, said McArthur.

The natural force of the open market is such that Minter Ellison is not seeing a significant increase in hourly rates, even as costs are rising.

“Margins are under pressure, so lawyers have got to get more efficient in the way they deliver services — more focused investment in technology, more innovation. Most of us have got quite sophisticated models for looking at our profitability by matter and by client,” he said.

Importantly, it was often the clients themselves who requested time-based billing in the larger cases. According to McArthur, sophisticated in-house lawyers use time as a way of measuring whether they are getting the most efficient use of experts retained by Minter Ellison, sometimes checking the progress of a transaction on a daily basis.

The NSW Report advised that firms be required to provide cost estimates to clients and keep them notified of any changes to that estimate, to give quarterly updates, a final bill no later than six months after completion of a matter and be banned from charging interest.

If firms failed to properly estimate their costs, then they could be subjected to a 20 per cent cut of the fees to be received. But Walker said it “starts to get impossibly difficult to provide estimates that are absolutely accurate”, adding that most lawyers do their level best to review estimates and keep clients informed.

In the ACT, complaints over time-based billing are never addressed to the Law Society. “We deal with a number of complaints, and quite a few of them relate to costs, but none that I’m aware of specifically dealing with a complaint about time-based billing as opposed to other ways of billing,” Walker said.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Legal fees report far from conclusive
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Scales
07:05
Transgender teens should not need legal approval for hormone treatment, court hears
A transgender 17-year-old known as Kelvin has appealed in the Family Court against the requirement o...
Appointed, Victorian Legal Services Commissioner
07:00
NFP CEO appointed Victorian Legal Services Commissioner
The CEO of a Victorian not-for profit pro bono legal services provider has been named as the state...
Human body, illegal organ trafficking, ALHR
Sep 22 2017
Australia poised to combat illegal organ harvesting: ALHR
The Australian Lawyers for Human Rights are calling for changes to the law so that organ trafficking...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...