How to charge ethically in an online world

 

It came as something of a surprise for private client practitioners to discover that their clients could claim a refund of a fee, if they registered a power of attorney between 1 April 2013 and 31 of March 2017.

 

It is almost unheard of for registration fees to be refunded or reduced, practitioners are accustomed to annual fee increases. The refunded fees vary from £54 to £34, so not a fortune. 

 

However, the application process for a refund can be completed online in just 10 minutes. The reason for the government’s decision for the fee reduction is to refund fees charged in excess of the fee needed to process the application.

 

It seems that during the relevant period, the operating costs reduced but the fee did not reflect that reduction. The reduced fee of £82 (from £110) fairly reflected the operating costs of the Office of the Public Guardian.

 

This is an admirable approach taken by the government and could result in a reported refund of fees of more than £1m.

 

This then begs the question; at what point do solicitors either refund fees or turn work away if that work can be completed more cheaply by a capable client?

 

Obviously, one wouldn’t expect a person charged with a crime, vulnerable adult or commercial client to undertake their own legal work.

 

People have the right to choose to represent themselves or instruct solicitors to do so, if they can access legal aid or afford to pay for the services.

 

However, we are currently operating in an era of increasing online development for HMCTS. The government is finally responding to the unmet need to make the court service more accessible to those who choose to represent themselves.

 

The question I have recently discussed with numerous solicitors is whether, in relation to some of these online applications, we can really add any significant value. 

 

Many family law solicitors offer fixed-fee services to those people who wish to proceed with an undefended divorce.

 

These fixed fees were traditionally modelled on a rule of thumb figure of three hours to complete an undefended divorce from beginning to end plus any court fees.

 

However, the solicitors’ costs can range from £500 plus VAT to £2,500 plus VAT which is the highest figure I have ever seen for an undefended divorce. 

 

These costs may have no real reflection upon how much time a solicitor actually spends undertaking the work for which they are charging.

For example, a solicitor whose charging rate is £250 per hour, may delegate the work in an undefended divorce to a junior whose charging rate is significantly less.

 

In many cases, an able secretary could manage this work using template letters and a little guidance. Is it ethical to charge a fixed fee reflecting a solicitor’s time, when the work of that fee earner is not reflected in the work done?

 

In the same example, if the fixed fee was agreed at £550 per hour but the recorded time of the combined fee earners totalled £400 plus VAT, should the solicitor feel morally obliged to offer a refund to the client as the ‘operating costs’ did not match the agreed fee?

 

I would argue that perhaps the solicitor should contemplate refunding these costs as they are not representative of work done, levying the agreed fixed fee could be ethically unsound.

 

I doubt whether the client would feel confident in this outcome. Conversely, if the time spent on the case far outstripped the agreed fee, it would be wrong to charge the client any additional costs unless the fixed fee retainer allowed for this. 

 

 

I submit that this reflects poorly on solicitors, who say that they will not change their fixed fee structure in the event that the divorce process becomes streamlined, using the online system.

 

A couple of years ago I was involved in an informal online survey regarding the charging structures employed by firms in this field.

 

I asked whether firms would be changing their charging structure to take into account the possibility of an easier online process, by and large those who responded indicated that they would not be reducing their costs.

 

I continue to ask solicitors the same question now that the online process has been in place for 12 months.

 

Once again, solicitors respond that they do not see any costs reduction for their clients on the horizon, unless the court fee is reduced by the new online system.

 

I have trialled the online portal and, without having to take my own instructions, the completion of the petition took no longer than 10 minutes.

 

The process of taking instructions can be lengthy but I cannot see that it could possibly take the same length of time to complete the online process as it did to complete the paper process. 

 

I was pleasantly surprised by a family law solicitor who recently indicated that rather than accept a retainer to represent a client for a fixed-fee divorce, he will send them a link to the online platform, informing the client that they will be able to deal with this matter without his assistance.

 

He offers a checking service if the client wants him to ensure that the relevant details have been properly dealt with and he charges only a nominal fee.

 

He is among a handful of solicitors I have spoken to in recent times who can see that it is unethical to continue to charge clients for this work in the same way that he did historically. 

 

He operates the same approach when it comes to the filing of online probate documentation, which is made so much easier by the new system which was launched in 2017 as a beta testing version. 

 

 

The online process is aimed to be quicker and easier and was rolled out after extensive testing earlier this year.

 

Solicitors were no longer needed, was the response in the legal press to the wide introduction of the probate service.

 

It would be interesting to know how many solicitors have taken this literally by turning work away where capable clients could easily complete this work themselves. 

 

Ian Bond, chair of the Law Society’s wills and equity committee indicates that the online platform has its place but cautioned against the potential dangers of DIY probate.

 

I am heartened that the Law Society committee chair, has responded positively to this new development and hope that many practitioners will follow suit. 

 

At the very least, a solicitor’s obligation (arguably) is to ensure that clients are made aware of their choices. Rather than charge a fixed fee or hourly rate to undertake work, is the client told in advance, that they have the option to do this themselves?

 

If the client then decides that at a time of distress or bereavement they would much rather rely on the professional services of a solicitor, then so be it.

 

My question to the profession is whether this information is being proffered, or whether we are keeping clients in the dark to protect our work streams. 

 

It is my firm view that as technology makes access to justice easier, as it is intended, solicitors need to respond ethically and always with their client’s best interests in mind. 

 

Sometimes, this will lead to the advice that the client can deal with matters without a solicitor.

 

The client can be informed that they can take legal advice on the complex issues that really require a solicitor’s attention.

 

We are not professional form fillers, legal advice should be seen to be valuable and I don’t doubt that clients will happily pay solicitors for such advice.

 

This new way of working is here for us to embrace, we should not cling blindly to the old ways of charging out of habit.

Legal News desk contact: editorial@solicitorsjournal.com