Fixed fee agreements are not new and have been around for a long time.
Law firms that deal with conveyancing (and indeed Licensed Conveyances) of residential property are perhaps the most popular examples of a fixed legal fee. They provide certainty to the customer and are most appropriate to legal instructions where the instruction is not complex, can be dealt with mainly in a procedural way and little or no “face-to-face” time is required with the solicitor.
However, reforms in the legal sector mean Fixed Fees Agreements are becoming much more common, with such arrangements also extending to stages of Court proceedings where the work involved can be reasonably determined.
This does not however mean Fixed Fee Agreements are less expensive. Indeed, they could make legal services more expensive if your solicitor’s business is not properly structured for such an arrangement.
Currently, for some types of legal work (conveyancing, probate being just two examples), a fixed fee can be supported by a business where there is a large number of clients on similar Fixed Fee Agreements, the volume of such instructions keeps costs reduced, the legal work is largely systematic or procedural and where the legal work can be done by individuals who may not be solicitors.
At Francis Wilks & Jones we will always consider a Fixed fee Arrangement but at the same time we take quality very seriously and do not allow our legal services to be prejudiced by cost-based considerations.
There is today a move towards a wider fixed fee culture and this can also now apply to commercial legal services provided, either on a stage-by-stage basis (which can be useful for litigation proceedings) or as a whole single instructions.
A fixed fee arrangement will always be structured tightly, to give the client certainty but also to prevent any unforeseen losses arising to the law firm by time overspent on a matter. Accordingly, a fixed fee arrangement is more appropriate to precisely defined tasks, where there is little or no risk of unforeseen events and the limitation of the instruction is understood and clear to all parties.
Once the legal work has been agreed, and the time likely to be spent and the extent of a legal instruction has been agreed between the client and his/her solicitor, a Fixed Fee Agreement can be implemented into the client instruction letter.
As with everything in life, a fixed fee arrangement is not without risks. As stated above, a law firm is a business with the same business needs to maintain control of costs and maximise revenues and profit.
Accordingly, a Fixed Fee Agreement will only be entered into if it is profitable to the business. Accordingly, the Fixed Fee acceptable to your solicitor will usually one which is profitable and indeed may well be higher than the cost that would otherwise be charged.
The reason for this is simple – some Fixed Fee Agreements will require more time than anticipated and some will require less – it is a fact of life once a client has agreed a Fixed Fee then that client will no doubt spend considerably more time seeking advice and assistance from his instructed solicitor who, at the same time, has to ensure his/her other clients are also being provided a quality service.
Provided the average cost of such Fixed Fee Agreements to the law firm balance out to be profitable, then this risk to the law firm is acceptable. However, it must be remembered that calculating this risk means agreeing a fixed fee that will be higher than the estimated fee on a time cost basis.
The benefits of a Fixed Fee Agreement are that you know precisely what your exposure to legal costs is to be at any given stage, which will often be required to be paid up front, and the solicitor will know precisely what s/he is expected to provide for that fee.
This often results in little or no dispute as to the legal fees charged on any instruction.
Equally, any such fee (in litigation proceedings) can be recovered in an identical fashion to any other legal costs and so there is no additional risk of entering into the Fixed Fee Agreement.
At Francis Wilks & Jones we will agree to enter into a Fixed Fee Agreement subject to a review of your circumstances and will always discuss these and any other funding arrangements appropriate to the nature of any legal services you seek and your personal financial circumstances.
Please call any member of our commercial litigation team for your consultation now on 020 7841 0390. Alternatively e mail us with your enquiry and we will call you back at a time convenient to you.