Legal Fees - Time is money.

(From Post Magazine)

An incompetent lawyer can delay a lawsuit for years - and a competent one for even longer, quipped Evelle Jansen Younger, a former Attorney General of California. Many clients may believe hourly-rated billing for legal fees encourages them to do just that, and a report by BDO Stoy Hayward, entitled Stop the Clock, states that hourly fee rates are at their highest ever levels and bear little relation to the value of the services provided.

The research, conducted two years ago, showed enthusiasm for a flexible menu of options, which suggests the importance of a more holistic and innovative approach to law firm billing. Although the report was published in 2007 not much has changed, according to Kathryn Britten, head of forensic accounting at BDO Stoy Hayward, who says: "When we revisited our survey group this year, we found more people discussing alternatives, but things have not changed substantially. While pressures to obtain value for money can only increase, 68% of in-house counsel had not asked for an alternative to hourly billing."

In-house counsel at RSA was part of the original focus group so some relevance to insurance is clearly perceived, but Anthony Hughes, chief executive at Horwich Farrelly and current president of the Forum of Insurance Lawyers, views the perception of fees 'clocking up' as somewhat dated. He says that most insurers use procurement departments these days with work going out to tender, even smaller ones. "One of the standard questions is: 'What are your charging proposals?'" he says, adding that the hourly-rate approach tends to be reserved for the bigger cases - worth GBP50,000 or more - and the clock stopped a long time ago for the more commodity-type cases, such as personal injury road traffic accident claims.

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