WITH A mantle to defend lawyers’ fees, the new president of the New South Wales Law Society late last week argued the legal profession has an important role in educating the community about the difference between what the lawyer charges and other legal costs.
John McIntyre anticipates that 2005 will be a year in which the high price of lawyers will again be thrown under the spotlight. Legal fees generally are always at the forefront of various issues, he told Lawyers Weekly. “The James Hardie inquiry is just one example of the susceptibility of legal costs to be continually under scrutiny,” he said.
The legal profession needs to be more conscious of the need to explain to clients the difference between legal costs and other costs such as court filing fees, stamp duty and other non-lawyer costs, according to McIntyre.
As well, the media needs to be more alert because they “perpetuate some of the myths about the levels of legal costs”.
The problem, according to McIntyre, is not that lawyers earn too much; rather, the government should come to realise that the amount of legislation “adds considerably to the cost of transactions and court cases”. We live in a vastly over-regulated and over-legislated country, he said.
The Law Society will this year seek to highlight this problem and “call on the government to fix it”. “I think [the issue of the complexity of legislation and its effect on legal costs] should be visited fairly and squarely by the politicians,” McIntyre said.
“They think legislation is the answer to everything… but the more laws there are, the greater the cost to the communities,” he said. “You need more people to enforce them, more administration, more compliance — all this adds cost. By 2025 we’ll be drowning.”
Time-based billing unlikely to be overturned: McIntyre
ON THE legal profession’s preferred method of charging — time-based billing — newly appointed NSW Law Society president John McIntyre said lawyers, as service providers, will find it difficult to abolish something their clients like.
“Whatever push various sectors make,” McIntyre told Lawyers Weekly, “the difficulty is that clients like it”. Managing partners in large firms have expressed concern that clients may be sceptical of a more free approach to billing, so these firms choose to work with time costing, putting into place maximum amounts, he said.
NSW Chief Justice James Spigelman AC said in February last year that over a period of 10 years, time-based charging had become almost universal but that he did not believe this method of charging was sustainable. “It is difficult to justify a system in which inefficiency is rewarded with higher remuneration,” he said, prompting loud applause from his audience.
Spigelman argued that with time-based billing, lawyers did not have the financial incentive to provide their services as quickly as possible. Although for most legal practitioners the sense of professional responsibility was a real restraint, a handful of members still exploited their position “by providing services that either do not need to be provided at all, or [they] provide them in a more luxurious manner than is appropriate”, he said.
At the time, NSW Law Society president Gordon Salier said that “perhaps some special inquiry might be established to look at the issue of costs and make appropriate recommendations”.