The Gazette 1986

GAZETTE

JULY/AUGUST

19

Correspondence

cost of time were also outlined in an article in the Gazette in October, 1984. Assuming that the cost of time comes to say £500.00 the solicitor should then consider all of the normal factors that govern what is a fair and reasonable charge having regard to all of the circumstances of the case. These factors are as per Schedule II of the Solicitor's Remuneration General orders: (a) The complexity, importance, difficulty, rarity or urgency of the matter; (b) Where money or property is involved, its amount or value; (c) The importance of the matter to the client; (d) The skill, labour and responsibility involved therein and any specialised knowledge given or applied on the part of the solicitor; (e) The number and importance of any documents perused; (0 The place where and the circumstances in which the business or its part thereof is transacted; and (g) the time reasonably expended thereon. The practice is then to charge this all-in fee without specifying the basis upon which it is prepared which, of course, can be gone into with the client if necessary. There may indeed be cases where a great deal of trouble was involved but in which the client may not have been aware of this and where it might be desirable to discuss the matter with the client. Solicitors who customarily use time records to calculate fees in this way report that they rarely have any difficulty in relation thereto as most of the clients are business people who recognise the reasonableness of this method of charging. If there is any possibility of a disagreement arising with a client on the basis of charge it would be necessary to obtain the client's written agreement to charging on a time basis.

The Editor, Law Society Gazette, Blackhall Place, Dublin 7.

Basis of Charge in Relation to Rack Rent Leases

Dear Sir, I receive frequent enquiries from solicitors as to the usual and proper basis of charging fees when acting for the Lessor in a typical 35 year Rack Rent Lease of a business premises. If a Bill has to be prepared for taxation it would comprise the appropriate Solicitor's Remuneration Act scale fee together with a charge for all of the other work in relation to the matter on an item for item basis. The changes in practice that have taken place since 1966 in relation to items which are not part of the scale fee have resulted in these other items creating the greatest amount of work and complications, i.e., furnishing of title, V.A.T. on the granting of the Lease, planning, etc. (See the Guidelines issued by the Conveyancing Committee published in the January/February Gazette 1980.) I have examined various attempts to devise unofficial scales which some firms use to attempt to come up with a fair and reasonable method of charging in relation to such transactions. Because of the wide variety of work that can be involved in such cases I have found no scale that I would favour and recommend that solicitors charge on a time basis which is most acceptable to the business community and which is the standard basis of charging in such matters in U.K. and America. For example, the most hideously complicated Lease I was ever involved with was at quite a small rent and a scale fee would hardly have paid the postage in that case. On the other hand one still occasionally comes across a case where very little work is involved but the rent is very high. In these cases one would love to charge a scale fee but these type of Leases are invariably for one's best client who wants reasonable value for money. Most of the Solicitors I know who do a lot of work in this area all rely on time records as the basis for calculating their fee. Solicitors often ask what a typical time charge would amount to but this is rarely helpful because a reasonable charge in a case in my experience may vary from £600.00 to £6,000.00. The most favoured way of calculating a fee based on time is to ascertain what the actual time cost to the office is based on records of times kept. This does not have to be a fancy time recording system kept on computer. Even solicitors who do not record time generally frequently note time whether on the back of the file or otherwise and all they need to know in addition is how to calculate the cost of time in accordance with recognised accountancy standards. The English Law Society publish a booklet entitled 'The Expense of Time', 3rd Edition, which can be obtained from The Law Society, 113, Chancery Lane, London WC2 IPC. Price £2.00 Stg. Methods of calculating the

Yours faithfully, Rory O'Donnell, Solicitor, 16 Fitzwilliam Place, Dublin 2.

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