- Lawyers’ hourly rates system called into question by Bailiff
- He has suggested the formal introduction of a fixed-rate service
- Do you think it is fair that lawyers charge by the hour? Take part in our poll
- Compare the 2015 costs for lawyers of different levels in Jersey, the UK and America below
THE system of lawyers’ charging hourly rates has been called into question by the Bailiff, who has said that the current method could be damaging the reputation of the profession.
The Bailiff, William Bailhache, said that a ‘sensible debate’ was needed about the charging of hourly rates and suggested the formal introduction of a fixed-rate service.
Speaking yesterday at the annual Assise d’Héritage, which marks the start of the legal year, Mr Bailhache told the court that the current system does not always reflect value for clients.
Jersey (top firms)
*Newly qualified (2 years’ experience): £285 – £350 per hour
*Five years’ experience: £325 – £395
*Partners: £495 – £625
Jersey mid-range firms
*Newly qualified (2 years’ experience): £250 per hour
*Five years’ experience: £285 – £350
*Partners: £375 – £495
London’s so-called Magic Circle (top five city firms)
*Newly qualified (2 years’ experience): £350 – £500 per hour
*Five years’ experience: £500 – £575
*Partners: £775 – £850
Other top London firms outside the Magic Circle
*Newly qualified (2 years’ experience): £250 -£350 per hour
*Five years’ experience: £350 – £495
*Partners: £550 – £800
National UK firms with regional offices
*Newly qualified (2 years’ experience): £195 – £295 per hour
*Five years’ experience: £300 – £350
*Partners: £400 – £500
Top American firms
*Newly qualified (2 years’ experience): £375 – £525 per hour
*Five years’ experience: £500 – £595
*Partners: £700 – £900
He added that although many legal firms apply fixed-rate charges the Jersey Law Society needed to address the problem regarding hourly rates.
‘At the heart of current difficulties, both in this Island and outside it, appears to me to be the cost of providing a legal service,’ he said.
‘It has become commonplace to calculate the fee by reference to an hourly rate.
‘From a business perspective, it is necessary to know how much one should charge to ensure that the business makes a profit and does not head for the bankruptcy court.
‘On the other hand, the value of the job to the client does not normally depend upon the number of hours which have been spent by the lawyer and his employees on the job in question.’
He added that charging an hourly rate was not beneficial to either the profession or to clients because the longer a job takes, the more that can be charged, leading to a business model ‘which must surely fail’.
Mr Bailhache added: ‘In the oath of office appear the words “vous vous contenterez de gages et salaires raisonnables”.
‘To my mind, that means – and has always meant – ensuring that the bill delivered is proportionate to the value of the job to the client, which of course carries the implication that the lower value jobs require to be done not only professionally but efficiently.
‘If that business model can be adopted, then not only has the right service been performed, but in the context of a domestic legal service, particularly in family and criminal matters, the risks of damage to the reputation of lawyers and intervention in legal practice business are much reduced.’
An Access to Justice working group is currently reviewing the legal system.
Responding to the Bailiff’s comments, Advocate Tim Hanson, partner at law firm Hanson Renouf, said that the Royal Court needs to update its procedural directives before any changes to hourly rates can be made.
He said: ‘The Bailiff’s comments clearly deserve serious consideration and great respect, but the legal profession may feel a little upset at the apparent criticism on hourly charging when the court’s own rules and practice directions are woefully out of date and shore up the very system that is now deprecated.
‘Indeed, there are also peculiar problems in Jersey’s obscure law that can, in certain areas, at least, mean that lawyers can only sensibly offer a bespoke service on hourly rates.’
He added that the legal profession as a whole was seeking greater efficiencies but challenged the court to ‘do its bit’.
Advocate Hanson said: ‘Our legal aid system needs overhauling as well as a coherent set of new procedural rules.
‘In the process of that reform, we may have to be bold.
‘We certainly can’t keep treating certain features of the Jersey legal process as if they were sites of special historical interest that can never be altered.’
IN December 2014 a lawyer was fined £15,000 by the Royal Court after charging a woman he was representing more than six times the amount of a debt
claimed against her.
Advocate Andrew Philip Begg was penalised by the court, which also ordered he pay £5,000 towards court costs, after admitting two charges of professional misconduct.
He billed a client £31,192 for work he carried out in challenging a £4,800 claim made against the woman through the Petty Debts Court.
The woman, who was described in a published judgment as a 26-year-old Portuguese woman of limited means, complained to the Law Society, which launched a review led by its disciplinary committee.
However, they found the matter so serious that they notified the Attorney General, who then took the matter to court.
According to the court’s judgment, the lawyer failed to give his client any indication of the likely cost of defending the claim against her and did not inform her how costs were increasing.
