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News item: Hourly billing for legal firms may be on the way out

May 16, 2012

The conference of the Association of Costs Lawyers recently was addressed by Lord Neuberger who, as the Master of the Rolls, has told participants that there are new business structures on the way which will not accommodate hourly billing.

Neuberger revealed that clients were no longer accepting of the method of hourly billing and fixed fees were on the cards as a more attractive option. Along with the use of Advanced Billing Systems (ABS’s), he stated that the current economic situation, and the progress of websites where legal companies can be compared, will make the advent of fixed fees far more likely with the draw towards lower fees options.

However, Neuberger was still optimistic and informed lawyers that he did not think that this would have a great effect on business or payments. He even suggested that cheaper litigation would lead to greater demand for it.

He further emphasised that taking on only a few cases and charging high fees drives valid claims away from the courts and a move towards a more realistic fee structure will encourage clients to employ a lawyer to take their case through the courts. The implementation of a lower legal fee structure would not mean lawyers would earn less, but it would offer greater value for money and any person who is unable to seek justice will now have the chance.

Neuberger made the claim that excessive legal fees had blemished the system of civil justice for a very long time and he had the utmost of praise for Lord Justice Jackson for his attempt to sort out the costing issue. “Jackson’s suggestions must help to bring down costs,” he emphasised, “otherwise Britain will be moving into an American style of costing”.

Neuberger also stated that judges would be asked to attend a training course, so that they can become familiarised with this new method of post-Jackson costing. He noted that a day of training would unlikely to be sufficient and judges will have to learn to understand the new system through hands on experience.

The conference of the Association of Costs Lawyers recently was addressed by Lord Neuberger who, as the Master of the Rolls, has told participants that there are new business structures on the way which will not accommodate hourly billing.

Neuberger revealed that clients were no longer accepting of the method of hourly billing and fixed fees were on the cards as a more attractive option. Along with the use of Advanced Billing Systems (ABS’s), he stated that the current economic situation, and the progress of websites where legal companies can be compared, will make the advent of fixed fees far more likely with the draw towards lower fees options.

However, Neuberger was still optimistic and informed lawyers that he did not think that this would have a great effect on business or payments. He even suggested that cheaper litigation would lead to greater demand for it.

He further emphasised that taking on only a few cases and charging high fees drives valid claims away from the courts and a move towards a more realistic fee structure will encourage clients to employ a lawyer to take their case through the courts. The implementation of a lower legal fee structure would not mean lawyers would earn less, but it would offer greater value for money and any person who is unable to seek justice will now have the chance.

Neuberger made the claim that excessive legal fees had blemished the system of civil justice for a very long time and he had the utmost of praise for Lord Justice Jackson for his attempt to sort out the costing issue. “Jackson’s suggestions must help to bring down costs,” he emphasised, “otherwise Britain will be moving into an American style of costing”.

Neuberger also stated that judges would be asked to attend a training course, so that they can become familiarised with this new method of post-Jackson costing. He noted that a day of training would unlikely to be sufficient and judges will have to learn to understand the new system through hands on experience.