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Key insights:

• In-house legal counsel want law firms to provide more transparency around billing for legal services
• Survey of 150,000 legal clients finds transparent billing is the second lowest ranked criteria out of 10 behind value for work done
• Larger law firms scored particularly poorly on fee transparency, especially the UK top-25 and Magic Circle law firms
• Some in-house legal leaders say legal consultants at platform law firms offer better transparency over solicitor fees
• Better communication through regular updates, itemised billing and notifications when costs over run can help ease client concerns.
  

Nobody likes being blindsided by hidden costs – even if we’re happy with the overall cost, when someone tries pulling the wool over our eyes, we get mad.

In-house lawyers are no different. The top law firms have a certain reputation for smoke and mirror tactics when it comes to legal fees – and up until recently, many in-house legal counsel have been happy looking in the other direction.

However, with growing demand for greater transparency from consumers and businesses alike, it’s time that law firms do away with confusing or vague solicitor fees, otherwise they might soon find their long-standing client relationships beginning to falter.

New report investigates why lawyers are choosing to become legal consultants

Legal counsel aren’t happy with billing transparency for legal services

Every year contacts 150,000 clients in the UK to assess their happiness with the legal services they receive from law firms – and transparency around lawyer fees is something that’s causing clients grief.

In-house legal teams ranked the service they’d received based on 10 different criteria, and transparency around billing was the second lowest (value for work done was the lowest). And interestingly, billing transparency is only getting worse, with satisfaction levels dropping 1% from the previous year.

Larger law firms scored particularly poorly on fee transparency, especially the UK top-25 and Magic Circle law firms where hourly billing is commonplace.

In the report, one in-house legal counsel said: “We had to push hard to get the firm to provide necessary [level of detail] and what we wanted was pretty basic really. This is something this law firm ought to have mastered a long time ago.”

Another said: “Despite numerous requests for transparent billing in accordance with our policies, fee estimates always overrun.”

In 2018, the introduced transparency rules forcing conveyancing solicitors, immigration lawyers, employment tribunals lawyers and a number of others to display prices and service information. However, even this seems to be ineffective – the recently said that more needs to be done from the likes of the SRA to clamp down on firms not doing enough to give clients information.

Fee transparency is why some general counsel are choosing legal consultants

Platform law firms such as Keystone Law, gunnercooke and Excello Law offer clients direct access to legal expertise – and their billing models are supposedly as straight-forward.

Nick Ducker, a corporate lawyer working at gunnercooke, says the transparent billing structure allows him to have a better relationship with his clients.

“The profession has a certain reputation of billing every minute of every day to the client, but being in gunnercooke on a fixed-fee basis allowed me to just engage better with my clients.”

Read: new ��˾����ҹ���� report – Rise of the legal consultants

Another supposed benefit of working with a platform law firm is that you get direct access to the leading lawyer, said Mark Swann, a Director at UK Business IT, an IT services company and Excello Law client.

“You get direct and immediate access to an expert in their field – you haven’t got to go through tiers of juniors to get to them,” said Swann.

“The price is also more competitive because these people are generally working remotely, so they can afford to do things at a reasonable rate. And because of the way these firms are structured, because we are a source of income for the lawyer, they care much more about me and my business, so you get a much more caring service.”

The pandemic seems to have altered the perception of top law firms for some. Andrew Cooke, General Counsel at esports company Fnatic, said the lockdown meant he no longer put large law firms on a pedestal.

“During lockdown you had the lawyer on the screen all the time so all of the theatre of the big law firm gets stripped away,” he said. While Cooke has yet to use a platform firm to access legal services, he wouldn’t hesitate to use one if an external lawyer he had a good relationship with jumped ship.

Steps law firms can take to be more transparent around legal services fees

To create more transparency around lawyer fees, law firms can put the following actions into place:

• Regular updates on fees to clients through practice management software
• Itemised billing with the names of the lawyers involved, time spent and their fee rates etc.
• Unexpected charges for admin tasks
• Accurate quotes and notifications when fees over run
• Discussing billing during client calls and openly sharing what they’re being charged for.

This data is something most law firms have access to – the only problem is that it’s not being communicated to clients.

This approach doesn’t just apply to large law firms. Family lawyer Zoe Bloom recently left platform law firm, Keystone Law, after 11 years to establish a new family law boutique practice.

Bloom says she has applied the fee transparency aspect of the consultancy model to her new law firm, BloomBudd LLP.

“We want to offer clients honest, straightforward legal advice, be transparent over fees and keep the team supported. We don’t have billing targets because they create a conflict between the client and solicitor. We don’t double charge our time by billing clients to train junior solicitors as well as pay for our time.”

For more information on how legal consultants are offering a more transparent billing process, read our new report.