Solicitors Journal

Of Legal Fees and Calories

IMG_6558Should law firms charge clients a service tip to help top up 
the income of law students and impoverished trainees? 
muses Kevin Poulter over his ice cream sundae

I’m writing from America, where solicitors are attorneys, lawyers are litigators and murder is homicide. It is the capital of consumerism. It is also home to some strange laws: it is illegal for a witness to cry on the witness stand in Los Angeles, which might explain why Gwyneth Paltrow now lives in the UK. In Alaska it is against the law to feed alcohol to a moose, and in New York City it is disorderly conduct for one man to greet another on the street by placing the end of his thumb against the tip of his nose, at the same time extending and wiggling the fingers of his hand. So no wonder the courts are busy making stars of Judge Judy and Calista Flockhart.

My experience over the past few weeks has also highlighted some strange practices that, I fear, are only months away from being adopted in the UK. Take this example: everything on a restaurant menu has the number of calories for the meal in bold numbers next to it, whether you are in McDonald’s or a Michelin-starred restaurant. Even the beer seller at the ball game wears a big pin badge to inform sports fans that the $12 souvenir plastic cup of Bud Light he is selling may take you over your daily allowance without the need to eat for the rest of the day. I’m presuming some new state law was passed making it compulsory for food outlets to inform customers of the calorie count before ordering, so they know just what they will get for their buck.

Although not a legal requirement in the UK, the same concept seems to have been adopted by recent entrant to the legal marketplace Riverview Law, which is offering legal services in the same way: a fixed-price service where you know in advance exactly what you will get and what the damage will be. This is likely to become an increasingly attractive proposition to the consumer in the world of ABSs. Think of it as an ‘a la carte’ legal market where clients no longer eat their starter, main and desert in the same restaurant, but move from place to place to satisfy their appetites, their individual tastes and the size of their wallet.

We have moved on from the days where 
a family used a lawyer for life and established a relationship with the firm through the generations. In the commercial world this isn’t a recent phenomenon, with sizeable businesses often selecting advice from separate advisers as and when the need arise.

Reality check

What is not so common is the promise of a fixed fee. Commercial firms, particularly with litigation, find it difficult if not impossible to provide accurate fee estimates with so many possible outcomes at each step along the way to a final hearing. Equally, commercial clients – and private individuals – don’t like to be faced with the likely scale of the final bill before the case is even off the ground. The same goes for that ice cream sundae – being confronted with the caloric reality takes away some of the pleasure.

If clients are to enjoy a la carte legal services, should they also factor in an additional service charge? In America, a tip is usually 15 to 20 per cent, to compensate the waiting staff for their low incomes, unsociable hours and to assist many working students and actors in their fledgling careers. So, with the announcement that the SRA is to abolish the minimum salary for trainee solicitors within the next two years – pushing it down to as low as £6.08 per hour – it may be that junior lawyers are forced to work two or more jobs to sustain increasing rent and living expenses, law school and university tuition fees and loan repayments.

A recent report in USA Today highlighted the risks of rising college tuition fees in fields where there is extreme competition for few jobs. A graduate degree costing $44,000 in student loans in 1996 has snowballed to more than $136,000. One graduate mentioned in the report said she has managed only a series of low-paid jobs in her chosen field and now has deductions taken from her wages to satisfy these debts and her home is under threat of foreclosure. Already in the US, student loans topped $1trn last year.

With no good news for law students on the horizon and the SRA apparently working against those seeking to enter the profession, this might be the reality check lawyers needed to address how services are delivered. It might also be a good time for the Legal Education and Training Review to consider a side course in mixology and silver service waiting.

Have a nice day, y’all!

This article was first published by Solicitors Journal on 1 June 2012, and is reproduced by kind permission

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