In The Price of Law leading legal costs expert Jim Diamond argues that the hourly rates charged by top London corporate law firms are so high that they risk restricting access to justice.
Hourly rates for a partner at a top London firm now exceed £1,000 – the highest level ever recorded. In nominal terms the top City of London law firms charge almost the same amount per hour as their American legal cousins except that the UK firms charge their clients in sterling.
Furthermore the report warns that charging by the hour rather than by the result – as is commonplace in other top corporate industry – is highly inefficient and a potential drain on productivity.
The report outlines three main causes for the rapid increase in hourly rates for top law corporate law firms:
- the increasing complexity of the UK tax and legal systems;
- the lack of transparency on legal costs that allows top law firms virtual control over their prices; and
- a shortage of competition between practices – which is indicated by the remarkable similarity in the rates charged by top corporate law firms.
Jim Diamond explains:
“The top commercial law firms in the City of London are regarded as some of the best legal practices in the world, and are some of the most expensive providers of legal services. However they are also some of the least transparent, particularly in terms of pricing: while they do publish yearly statistics on the performance of their firm, from turnover to profit per partners, they do not publish information on the hourly rates charged to their clients.
Steps should be taken to ensure fair practice in legal procedure. The “billable hour” is an outdated and unsustainable billing method for legal services to continue. Alternative billing methods must be considered and legal procedure must be simplified to ensure that the legal market place thrives in the long term, and the price of law is not punitive.”
Lord Justice Jackson has now put forward proposals for moving to a fixed fee basis for all litigation work, suggesting that fees are capped, stating last month that:
“Remuneration on a time basis rewards inefficiency. Unrestrained costs shifting drives parties to leave no stone unturned: the more costs mount up, the more determined each party becomes to ensure that the other party pays them. The result is inevitable – a civil justice system which is exorbitantly expensive.”
The Lord Chancellor should give full consideration to these proposals in order to ensure that the legal market place thrives in the long term, and that the price of law is not punitive.
Media coverage:
The Times: £1,000-an-hour lawyers ‘restrict access to justice’
Financial Times: Top London lawyers charge £1,000 an hour, study finds
The Guardian: City law firms charging up to £1,100 an hour
Bloomberg: Top London Lawyers Now Cost More Than £1,000 Per Hour
Bloomberg : Lawyers Earning 1,100 Pounds an Hour Put U.K. Justice at Risk
The Independent (front page): A legal extortion racket
The Independent: Top City law firms accused of restricting access to justice by charging up to £1,100 an hour
The Independent: Super-rich clients are distorting the fees charged by lawyers, leaving ordinary citizens without recompense
BBC Radio 4: Today Programme 05/02/2016
The Times, The Brief: Research: City law firms bill at £1,000 an hour
BuzzFeed News: Top City Law Firms Are Now Charging More Than £1,000 An Hour
The Scotsman: Martin Flanagan: Legal eagles feast on fat
The Irish Times: Legal eagles in London charging £1,000 an hour
Legal Week: The £1,000 question: are City lawyers’ rates really too high?
Legal Week: Top law firms charge market rates: why the surprise?
The Global Legal Post: Report: cost of top London firms restricting access to justice
Legal Cheek: Magic circle partners bill £110 for typing ‘yes’ or ‘no’ and hitting ‘send’ on an email, claims law firm costs expert
Litigation Futures: Right-wing think tank backs Jackson’s call to extend fixed fees
Law Society Gazette: Costs expert slams £1,000 hourly rates at top commercial firms
Law Society Gazette: Vara rejects Dyson’s description of ‘desperate’ fees research
Law Society Gazette: Legal tech: easing the pain-points
Law Society Gazette: Legal fees and the free market
Law Society Gazette: Legal tech: easing the pain-points
Law Society Gazette: Price of Law: are City firms worth their fees?
The Lawyer: The price is right: how UK firms can steal a march on the Americans
New Law Journal: What is the price of law?
Solicitors Journal: Price of City law restricts access to justice
South Square Digest: Article on Lord Justice Jackson and Price of Law
Management Today: £1,000 an hour for a lawyer is a fast-cycle rinse
The Business times: Lawyers earning 1,100 pounds an hour put UK justice at risk
Global legal post: Report: cost of top London firms restricting access to justice
Australasian Lawyer: Study says billable hour is unsustainable
HITC: Lawyers’ hourly rates too high for justice
Digitallook: Friday newspaper round-up
London South East: Friday newspaper round-up
IFA magazine: Friday newspaper round-up
RTE: Today in the press
Financial Times (front page): Top London lawyers charge £1,000 an hour, study finds
Dagens Nseingsliv: Toppadvokater i London tjener 12.000 kroner timen
Prawnik.Pl: Astronomiczne stawki prawniczej elity
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