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Legal fees to be reviewed, again

Legal fees to be reviewed, again

EXORBITANT LEGAL fees are this week again the subject of scrutiny in New South Wales. Legal bodies and other organisations have submitted their views on an issue close to the hearts and pockets…

EXORBITANT LEGAL fees are this week again the subject of scrutiny in New South Wales. Legal bodies and other organisations have submitted their views on an issue close to the hearts and pockets of the NSW profession and public.

Chief Justice of the NSW Supreme Court, Jim Spigelman, argued at the Opening of the Law Term dinner in February last year that time based billing produces a perverse result whereby the incentive to work productively is distorted.

“A handful of members of the profession exploit their positions by providing services that either do not need to be provided at all, or provide them in a more luxurious manner than is appropriate,” he said. Spigelman’s comments prompted fierce debate from stakeholders within the legal profession.

Adding fuel to the fiery issue, the former president of the Law Society of NSW, Gordon Salier, commented that solicitors should not be tied to the billable hour. He suggested that it was time to question the thinking behind the billable hour and to explore alternatives that would better serve both the profession and the public that pays it.

Now, in response to the debate, stakeholders, including the NSW Law Society and the Australian Lawyers Alliance, are submitting their views for consideration by the NSW Government through its Legal Fees Review Panel. Interested bodies are in the process of responding to the discussion paper LawyersCosts And Time Billing.

The review is considered by some to be the biggest salvo in NSW Premier Bob Carr’s battle with the legal profession. “Everyone has an anecdote about a lawyer handing them an outrageous bill, after a relatively small matter,” he said last year. “It is time there is more scrutiny in this area.”

The NSW Law Society, now led by new president John McIntyre, argues the legal profession is the most regulated profession in the country, especially in New South Wales. “Accountants, architects, engineers and other professionals… do not have imposed upon them such stringent provisions in order to be paid a fair and reasonable fee for services rendered,” the Society’s submission, obtained by Lawyers Weekly, reads.

In 2003, 20.3 per cent of the 2,760 written complaints received by the Office of the Legal Services Commissioner (OLSC) about lawyers related to overcharging, which resulted in the review being established.

The NSW Law Society, however, expressed a number of concerns about this representation. “There is no indication… as to the number of justifiable complaints dealt with by the OLSC. It is accepted that there may be a few justifiable complaints and the [Costs Working Group of the Law Society (CWG)] supports the position that these cases should be fully investigated to find out whether the costs were justified.”

“Much has been made of the alleged overcharging by solicitors in the media and elsewhere,” the CWG stated.

In an interview with Lawyers Weekly, McIntyre said he did not believe lawyers’ fees should again be under review. “[Lawyers] are under more scrutiny than anyone else,” he said. “My view is that the level of regulation in relation to solicitors and their costs will [raise] legal costs.”

“If you look at the complexity [of billing and regulation], solicitors need to consider their business structures,” he said. Internal administration is required to make sure firms comply with the requirements, and this adds a layer of administrative costs. “The more the administration costs, the more they have to charge.”

The Australian Lawyers Alliance supports efforts to lower the financial cost associated with accessing the judicial system, according to its submission. However, it stated it is not clear that the appropriate solution is for solicitors and barristers to simply lower their fees or adopt alternate billing methods.

“The reality is that use of the justice system is expensive for all litigants,” the Lawyers Alliance said. “While some gains may be made in manipulating the work practices and billing regimes of lawyers… the real gains… are to be made by altering the court processes and rules, and the strategic behaviours that they facilitate.”

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