Creating Value For Clients

One issue that has concerned me for a very long time is the basis for charging for legal services. Lawyers' charges are often seen to be high, inflexible, and unjustifiable. During the past twenty years or so, costing methodology has changed tremendously. In 1980, when I first commenced practice, there were industry wide charges for many legal tasks. There was a scale of charges for certain tasks that was used by every lawyer - in fact it was a breach of the lawyers' code of ethics to charge less than the scale of appropriate costs. Other tasks were charged for on an ad hoc basis, loosely based around the concept of giving value to clients, but more probably based upon a perception of what the market would tolerate.

The advent of the Commerce Act 1986, which governs anti competitive behaviour in business, outlawed the scale of charges. To give lawyers their due, in my opinion the legal profession was quick to adopt genuinely competitive charging for much legal work which previously had fixed fees. Real costs for clients have, in the last fifteen years, dropped dramatically for standardised legal services such as conveyancing and company incorporation. That trend will continue for much of the work that can be standardised and readily accessed by business in the information technology era. Such changes have not been without their problems. They have not been universally adopted.

For at least the last decade or more, the standard basis of charging has been the time taken to complete a task. It is standard in the legal profession for time to be recorded (generally in six minute units), and for accounts to be based on that time. This leads to its own set of anomalies. Arguably it encourages lawyers to act inefficiently - the longer a task takes the greater the reward. It also does not take into account the value received by the client. Neither does it recognise that some tasks are short on time, but heavily invested with good legal strategy, foresight, and experience.

I am committed to value based billing - ensuring that my services are delivered to my clients upon the basis that the client pays a fair price for the value given to them by me. That does not mean that I charge at bargain rates. I am not a discount lawyer (there are some around). It means that in assessing an appropriate fee for a task I will take into account not only the time taken for the task, but its complexity, the value that I have added, and the degree of specialty involved. I still record time taken as a guide to charging. In appropriate cases (generally when the scope of a project can be anticipated with a reasonable degree of accuracy) I am prepared to commit to fixed prices for tasks, although those prices will be based upon a given set of assumptions, and generally given upon the condition that if the underlying assumptions change because of matters beyond my control, the price will change also. In some cases I will charge less than I would have charged based on the time taken for the task at my standard hourly rate; in others I will charge more. The ultimate determinant will be the value that I have given to my client.

I am prepared to be completely transparent in my charging; any client is able to see all of my charging methodology and records upon request.

In exchange, I ask my clients to discuss their views on charges openly with me, to pay my accounts promptly, and to acquaint me with all relevant circumstances at the commencement of a project. If these simple rules are followed by us all, we will enjoy a long and fruitful relationship.

If you have a query with my account, please let me know, so that we can sort it out promptly. One of the real benefits of working with a small firm such as mine is that you are dealing with the decision maker. I am in a position to quickly resolve your issues. I am the costing committee, the board of directors, and the quality control committee. I do not have to obtain a second, third and fourth opinion and sign off to make a decision for you.