The Gazette 1988

JULY/AUGUST 1988

GAZETTE

CORRESPONDENCE

solicitors whose clients are obliged to pay their costs. Eventually they will have been forced to agree fees t h a t w o u ld gene r a l ly be considerably less than the cost to their office of producing the work in the first instance. There would in all probability be resentment on the tenant's solicitor's part that his client has been forced to pay too mu ch and on t he l and l o r d 's solicitor's part that he has been paid too little and would not be able to recover sufficient (if any) from the client to ensure a profit. Were t he l a t t er to t ry to ob t a in compensatory payment from the client he would be likely to come in for adverse criticism. There are other such glaring examples. My records show that much domestic conveyancing in recent times does not pay on full scale, let alone half scale, and that one does not get anything like the cost on average of producing a carefully drawn Will. There are other similar extractable examples. Unless the entire profession i.e. solicitors on both sides of the transaction, has a satisfactory and acceptable (by consensus) method of costing and therefore of pricing work it, and particularly individual members in localised areas, could be exposed t o o d i um and c o n t empt f or charging reasonable cost based fees unless these fees would be seen as a norm. The public is critical of the normal huge price variations for similar work that an inexact science produces. There is no doubt that in the short term w i th the adoption of time costing and charging the fee per job in certain types of matters would rise, that many traditional types of work wou ld be seen to be unattractive by solicitors and might possibly risk, except in extremely specialised practices, extinction. The discipline of time recording for a solicitor need be no more demanding than about 45 minutes a week. The calculation of expense rates because it relates to the extraction of budget information would take some hours but then that need only occur once annually. It would be up to the expertise of the Council to ordain practice standards and to decide how to combat the possibility of short term adverse publicity that might occur from the hiking of some traditional

fees, the lowering of others and the dropping of some types of work that cannot be transacted by solicitors at a reasonable price. I have no doubt that, in the long run, provided there is universal solicitor acceptance of the cost of time spent as a basis or one of the bases for billing, solicitors' charges will tend to level off and be predictable and give less reason for complaint by the public. As a valuable side effect the issue of solicitor and client charging in litigation cases should become clarified as being normal and above board, party and party costs (if awarded) being merely a none- i n d emn i f y i ng subs i dy to t he successful litigant. The abolition of binding scale fees for conveyancing and other types of work and the introduction of a con t i ngency e l ement in successful litigation cases could form part of the scenario but these are po l i t i cal ma t t e r s. The embarkation of individual firms on advertising to my mind will not help the billings of the profession except marginally. The basic problem of over c a p a c i ty and under re- muneration on the profession will take other solutions to cure. Time costing and charging would make a major impact if accepted and applied.

97 Upper Georges Street, Dun Laoghaire, Co. Dublin.

The Editor, The Gazette, The Law Society,

27 th May, 1988

Dear Sir, Time costing, cross subsidisation etc.

President Tom Shaw's message to the profession in the April issue of the Gazette is timely. I am committed to the discipline of time recording having used it as a management aid since the intro- duction of the Law Society's pilot scheme launched in the early 70's. During this period our office has assiduously recorded the time of all fee earners. Our experience leads me to believe that recording is an essential management tool. How- ever, in the absence of informed experience and acceptance by solicitors generally the President's call to it and aga i nst c r oss subsidisation could fail to make any really wo r t hwh i le impact. I believe that one way his message would get through would be by having a national saturation of the profession along the lines of Loosemore and Parsons or other- wise through various Bar Associa- tions so that all wou ld realise how absolutely essential it is that the profession begin to price on a cost plus basis. Such method of pricing wou ld be new only to solicitors. Traders and artisans and others have been pricing in that fashion for centuries. The reason I suggest such a radical approach is that unless the profession begins to understand where it's cost centres are there will retain huge variations in billings for similar wo rk between one solicitor and another wh i ch will ensure that solicitors generally continue to retain their low public image when it comes to charging. As an example, most practi- t i o n e rs w i ll have had t he experience of dealing in lessors' c on s ent cases w i t h t e n a n t s'

Yours sincerely,

JOHN HOOPER

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