The Elephant in the Court Room

Guidelines on Itemised Bills

Following on from my previous post on itemisation of counsels' fee memos, my attention has been drawn to draft guidelines on itemised bills, published by the Queensland Legal Services Commission.

The Commission's website states that it:

"develops and publishes two kinds of policies and guidelines - policies and guidelines we develop and publish for the benefit of the profession to assist practitioners to better understand their professional obligations in areas that have proved problematic, and policies and guidelines we develop for use in-house and that we publish in the interests of transparency."

I applaud the Commission in publishing such guidelines.  Often practitioners are unaware of their duties and obligations, and the ethical issues surrounding the practitioner/client relationship.  A recent discussion in our office centred around how frequently we see solicitors charging their clients for preparing their bills to their clients, dealing with the client when the client queries bills, and the like.

The test is always - did the work benefit the client?  If it was only to the lawyer's benefit, it is rarely (if ever) chargeable to the client.

Other guidelines published by the Queensland LSC relating to charging for outlays and disbursements, charging fees in speculative personal injury matters, and aspects of advertising.  I recommend all practitioners visit the site, whether they are Queensland based, or not.  

What does the law firm of the future look like?

In April 2009, lawyers, clients and law students predicted what the firms of the future would look like, in a competition at Indiana University - Competitors envision law firms of the future: IU News Room: Indiana University .  The aim was to structure a firm which would thrive for a further 20 years.

Common themes were alternative fees, a collaborative working environment and a focus on efficiency.

Three years one, what progress has been made?  Alternative fees are definitely on the agenda and increasing.  Good firms are focussing on the other two, with efficiency measures going hand in hand with profitable alternative fee arrangements.  Collaborative working environments still have some way to go.

But there remain too many firms who are taking no steps to change.

How many will still be in existance in 2029? 

For those who aim to be thriving in 20 years, consider attending a Firm of the Future forum in Australia in March 2012.  Guaranteed to be interesting, thought provoking, and full of ideas to ensure your firm thrives.  

How detailed do Barristers' fee memos need to be?

This question was in issue in a taxation in the Victorian Costs Court last year.  Counsel for the party seeking to review counsel's fees  submitted that entries in the fee memo detailing  "Reading and preparation" were not sufficiently particularised to allow the lawyer and client to determine what documents were read or what was prepared and whether the time claimed for that work was reasonable.  This was despite the fact that the solicitors seeking to review the fees were present at most if not all of the conferences claimed by counsel.  Counsel's costs agreement distinguished between "Reading brief and advising" and "Preparation and conferences", and it was argued that the fee memorandum should also provide a breakdown of time spent "Reading brief", "Advising", "Preparation" and "Conferences".  It was not sufficient to have global fees for "Reading and Preparation".    

The cases of  Clayton Utz Lawyers v P & W Enterprises [2011] QDC 5 and Bartex Fabrics Pty Ltd v Phillips Fox (1994) 13 ACSR 667 were relied on as authority for the proposition that an itemised bill must contain such detail as will enable the client, or those advising him, to determine whether to seek a review of the costs claimed, and that general statements as to time spent reading documents are not sufficiently itemised.

Counsel for the barrister sought to distinguish these cases on the basis they relate to solicitors rendering invoices to clients whereas counsel was rendering fees  to his instructing solicitor in circumstances where the solicitor was aware of the nature and volume of material contained in the brief, and was present at the conferences claimed by counsel.  In those circumstances, the memorandum of fees was sufficiently itemised to allow the solicitor to determine whether the time claimed by counsel for reading and preparation was reasonable or whether to seek a review and to advise the clients accordingly.

His Honour Associate Justice Wood held that the memorandum was not sufficiently itemised.  In the context of the costs agreement, the time spent by counsel reading and preparing should not be lumped together and notes of conferences  should refer to the parties in attendance.

We see many fee memoranda from counsel which, in light of His Honour's comments, would not be held to be sufficiently particularised.  This is an issue for both solicitors and counsel, particularly in light of the rulings in Feesty v Henty Jepson & Kelly that clients cannot review counsel's fees unless there is a direct retainer between counsel and the client.