27/05/2014

Traditionally, lawyers have charged their clients by the 6-minute unit or by the hour.  However, in modern litigation and legal disputes, clients are expressing the view that in order to make an informed financial decision they need accurate information on the expected costs and the timing of those costs to work out if it is in their best interest commercially to engage in or defend a legal dispute.

Being involved in a legal dispute can be a protracted and costly experience both in terms of money and executive time for clients away from their business.  

It is often said in the media that "time-based" billing of clients by lawyers is counter-productive for the lawyers and for clients it leads to unexpected costs or worse "bill shock" as the client is not prepared for or does not understand the basis of the charges.

The question is, if "time-based" billing is not in either the client or the lawyer's interest, what are the alternative arrangements that will lead to certainty for the client so an informed decision can be made prior to taking any steps in a legal dispute?

It is equally important that a party responding to or defending a legal dispute is aware of the likely costs as it too needs to make an informed decision about the steps and costs in defending such a dispute.

Fixed-Fee Arrangements

In response to these concerns, Townsends Dispute Management Division has adopted and is continuing to develop a number of litigation/legal dispute services with different sorts of fee arrangements.

These alternate fee arrangements depend on the type of matter and the work that can be predicted.  

1.    Fixed-Fee Quote – a quote (as opposed to an estimate) of fees is provided at the outset.  If fees are incurred over the fixed fee quote, those fees are not charged to the client but absorbed by Townsends.

2.    Staged Fixed-Fee Quote – a fixed-fee quote for matters that are more complex and will have a number of discrete stages or events during the litigation/dispute process.  This will involve an estimate on timing of the events as well as a quote on costs so the client can manage and budget for the quantum.

In order for Townsends to provide its fixed-fee or staged fixed-fee quote, it is vitally important that all relevant information is provided by the client at the outset to enable us to quote a fixed fee for the work to be undertaken.

Online instruction forms

For the simpler matters, Townsends has also developed a number of services which utilise online instruction forms which the client can complete directly from the Townsends website (www.townsendslaw.com.au).  It reduces the client's and lawyer's time in obtaining instructions in more traditional methods such as in a face-to-face conference, by phone or email.  Those time savings are then translated into fee savings.

Not all litigation/legal dispute matters can be predictable and to a large extent matters often depend on the conduct of the other parties involved.   Clearly we have no or little control over those parties or their solicitors.  

But if you have a legal dispute, please contact our office to discuss the fee arrangement that may be able to be offered for your specific matter.

If you have any questions in relation to fixed-fee matters, please call us on (02) 8296 6222.