What you should know when instructing a solicitor on an hourly rate basis

As a landlord you will be experienced in dealing with a variety of professionals and service providers. In many of these relationships the costs to be incurred are fixed or can be predicted with a significant degree of accuracy.

Unfortunately, when a legal dispute arises it is difficult to predict an opponent’s actions. It is often not certain whether a case will conclude promptly, proceed to court, require extensive expert evidence or will involve complex findings of fact.

Anybody considering instructing a solicitor on an hourly rate basis should consider the following points:

Hourly Rate

Many people assume the hourly rate charged by their solicitor to be competitive for work of that nature and therefore reasonable. This is not always the case. Your solicitor should advise you if the hourly rate charged is such that it would not be recovered from your opponent in full.

Where the hourly rate agreed with your solicitor will remain payable as a matter of contract.

However, if your solicitor fails to advise that the rate charged is unlikely to be recovered from your opponent, the hourly rate can often be reduced to a more reasonable rate which reflects the rate which would be recovered from your opponent.

Time Recording

Routine letters and e-mails sent (but not received) and telephone calls made and received are charged in 6 minute units. All other time is charged on the basis of the amount of time incurred to the nearest whole 6 minute unit.

According to Charles from Check My Legal Fees “An example of the importance placed on time recorded by solicitors is the leading international law firm Nabarro LLP. It made headlines in October this year for instructing lawyers to charge clients for time expended whilst visiting the toilet! The reasoning given was that the lawyer would be thinking of your case whilst on the toilet!”

Reasonableness of time expended

Your solicitor can only recover payment for costs which are reasonable and proportionate to the nature of the case, the work undertaken and the conduct of your opponent. Your costs can be reduced by the court on this basis. Just because time is recorded by your solicitor does not mean it is recoverable from you or your opponent.

Costs Estimates

In order to protect a purchaser of legal services a solicitor is required to provide an initial estimate of the level of costs which will be incurred. You should ensure this estimate provides details of how this has been calculated and what work is included. This estimate must be updated as the case progresses, further information becomes available or additional costs liability is foreseeable.

Where the costs claimed by your solicitor are in excess of the cost estimates provided, it is often possible to limit the fees your solicitor can recover to the cost estimate provided to you by your solicitor. The more detail within the estimate, the easier it is to identify where a solicitor has exceeded his estimate and therefore to seek a reduction to the costs claimed.

Costs recovery from your opponent

Your solicitor can only recover costs from your opponent which are reasonable and proportionate to work required due to the nature and complexity of the case and your opponents conduct. Typically this will be between 60% and 80% of the costs claimed. Many solicitors expect you to pay any amount not recovered from your opponent.

If your solicitor’s hourly rate is higher than that recoverable it is almost a certainty that you will still have to pay a proportion of your solicitor’s costs even if you win. Unless your solicitor agrees to limit his fees to those recovered from your opponent.

The majority of solicitors are extremely professional and charge appropriately for the work they undertake. However in our experience it is common for errors in time recording to be made and disproportionate and unreasonable costs to be claimed by a significant minority of solicitors.