Time is Money - No it isn’t;Yes, it is!

Posted by Michelle Barron on 14th December, 2018 in Opinion and categorised in .

“Time is Money” – Benjamin Franklin

For any ‘lawyers’, from Office Junior to Senior Partner, Franklin’s axiom has, ever since lawyers started charging by the time unit (whatever quantum of time that might be) rather than taking a flitch of bacon in payment, been the mantra that lawyers have lived by.

Billable time is King!

Not so. In the Brave New World of Fixed Fees (in whatever discipline) billable time is no longer the yardstick; cost effectiveness is the key. Let us give ‘cost effectiveness’ it’s proper name: it is ‘churning’; do the job, get paid, move on to the next task.

Where have fixed fees led us to?

In the field in which I do most of my work (Publicly Funded Children and Family Law Act) the introduction of Fixed Fees has over the years, in my view, led to a marked change in the way that clients are dealt with and the work is done.

The main problem is the ‘cliff edge’ effect that the imposition of fixed fees has on solicitors being reasonably remunerated for the work they put in. For instance; when acting for a parent in a Public Law Child Care case the initial fixed fee (in the West of England) is £2616. The Exceptional Case Threshold (ECT) is twice that at £5232. Unless the conducting solicitor’s core, or base, profit costs (which excludes Advocacy; for which they receive a separate fee) exceed that upper limit, they receive the basic fixed fee of £2616.

Thus, there is no incentive on the conducting solicitor to ‘go the extra mile’ unless they can see that by doing so they will surpass the ECT, and any time spent beyond the basic fixed fee, where a matter does not go exceptional, is, quite palpably, time that is lost as a profit making opportunity and one that, as I know from my days in practice, draws frowns from the ‘bean counters’ in the firm.

Such a fixed fee regime adds pressure to limit work done; to bring the job in at a cost below that of the fixed fee, creating a clear profit, or to pad out the work to ensure that the ECT is reached and exceeded; triggering payment at hourly rates.

Neither scenario is good for the fair and reasonable exercise of justice. In the former case, there is a risk of corners being cut, documents not being properly considered, and potential lines of enquiry not being followed. In the latter case, additional and un-necessary work being undertaken in the hope that ECT will be breached and Nirvana achieved.

To break the fixed fee down: at the ‘out of London’ hourly fee rate of £52.57 per hour, £2616 equates to a representative 49.8 hours of work.  Care Cases are expected to be completed within 26 weeks i.e. an average of 1.9 hours’ worth of work a week; it is however surprisingly difficult to break the ECT.

It is the dichotomy of those positions that engenders the huge amount of what I consider ‘free work’ that hardworking lawyers, simply trying to do the best for their clients, end up doing, and from which the Government benefits, by not paying for.

It is this, in my view, which is putting at risk the availability of quality advice to those people who need it, at a time when they are vulnerable, as more and more firms pull out of doing publicly funded work.

I am aware that the counter argument is that such a regime encourages efficiency and avoids tardiness. However, is it fair that a conducting lawyer may have to spend a great deal of time considering current and historic Police Records, contact notes, detailed assessment documents and seemingly endless social work reports, any of which might contain information of importance to their client’s case, and yet receive no payment for that work just because, even with the time spent, the core costs fail to breach the ECT.

I am sure that it will be pointed out that with the payment of Advocacy Fees, including ‘Bundle Payments’ that balance is restored and that conducting lawyers are therefore compensated ‘in the round’. I disagree. The payments for advocacy, as well as the basic hourly rates, have been whittled away over the years providing less recompense and payments for bundles are limited.

Also, the conducting lawyer can ‘lose’ access to Advocate Bundle payments if Counsel has been used and they claim the bundle fees.

With lawyers limiting the work they do so as not to overrun the fixed fee the ‘average’ level of ‘actual costs’ incurred is falling. The actual costs on any claim made to the LAA have to be reported; this can only be so that as the average falls the ‘statistics’ will be used to lower the fixed fee even further; or am I being a mite cynical?

I would propose that there should be a further ‘Fee Element’ in fixed fee cases. Simply that, where there is an identified tranche of documents, possibly identified in the same way as for Advocates Bundles, there should be a further payment made to conducting lawyers.

This would mean that as bundles ‘grew’, as they are accustomed to do as the case progresses, conducting lawyers would be able to properly consider additional documentation without running the risk of ‘overshooting’ the fixed fee, but falling short of the ECT, and providing ‘unreasonable’ levels of pro bono work.

Radical stuff, I know; but surely something radical is required to try and address the problem I have identified in this article.

One other point: Can the LAA please explain why, when making a claim for a fixed fee there is a requirement to provide a ‘Narrative’ of the case?

If one is claiming the fixed fee, what need is there for any justification of it?

This article was written by Neil Lobb. Before becoming a costs draftsman in 2003, Neil practiced as a general litigator, including family work, in both London and the far southwest.  He has also advised solicitors on legal aid file management and costs maximisation. He is now the Practice Manager at Burcher Jennings Truro office.