In recent years, the traditional pricing arrangement between a law firm and a client has been increasingly challenged by requests for alternative frameworks, while the turbulent economic environment has further squeezed budgets on legal spending. Law firms in Asia share what they have experienced with clients’ demands in fee arrangements and how they are navigating the new dynamics to achieve continued profitability.
HAVE YOU SEEN CLIENT DEMANDS WHEN IT COMES TO FEE ARRANGEMENTS AND PAYMENT TERMS EVOLVE IN THE PAST YEAR? HOW ARE YOU ADAPTING TO THE SAME?
EDDIE LOOK, partner, Tanner De Witt
We recognise the evolving demands of our clients in today’s landscape, especially in light of the past three years. At Tanner De Witt, we take pride by adapting to changing needs, offering innovative fee arrangements and payment terms that prioritise transparency and value.
Transparency is at the heart of our approach. To address this, we will agree to fixed fee structures for specific services and matters where appropriate. By providing clients with upfront information on costs, we enable them to make better-informed business decisions with greater financial certainty. Alternative fee arrangements have emerged as a key component of our client-centric strategy. We can offer flexible options, where appropriate, such as capped fees and stepped discounts for volume work or blended rates, which all align our interests with those of our clients. This fosters a collaborative relationship and underscores our commitment to achieving the agreed objectives within budget. Our delivery approach is to maximise efficiencies by carefully balancing the involvement between partners and associates when executing tasks, ultimately leading to greater value and cost-effectiveness for our clients.
Our billing practices prioritise client engagement and satisfaction by providing detailed monthly billing statements, offering a comprehensive breakdown of services rendered. Our communication is the cornerstone of our client relationships. We maintain open channels of communication, providing regular updates on case progress and addressing client concerns promptly. This approach demonstrates our commitment to keeping clients informed and engaged throughout and helps us to achieve our goal, which is to deliver unparalleled legal services with client satisfaction.
CHOOI JING YEN, partner, Eugene Thuraisingam
With Singapore relaxing its rules surrounding conditional fee agreements and third-party funding, especially in arbitration-related matters in 2022, clients are demanding more sophistication in fee arrangements. Especially so if they come from jurisdictions where contingency fees have been the norm, in contrast to Singapore’s strict prohibition against the same until recently and only in respect of certain prescribed matters. If requested to do so, a Singapore lawyer would have to consider the regulations very carefully to ensure that the matter in question does fall within the circumscribed exceptions, and that the client is properly and transparently informed in plain language of the various contingencies, some of which can tend to be quite complex.
The introduction of new costs guidelines for contentious court matters in 2021 also saw a general uplift in party-and-party costs awards. This is reflective of the inflationary environment in Singapore and also means that solicitor-client costs have been on the general uptrend. This has translated to more requests for deferred payment schemes and even requests for contingency fee arrangements. Unfortunately, the range of matters for which contingency fee arrangements are allowed are still narrowly circumscribed, and to fall foul of this can lead to grave professional consequences.
That said, more innovations to fee arrangements are only to be expected and we should see an expansion in the utilisation of conditional fee agreements as well as third-party funding in the coming years, especially as the latter continues to be a growing industry service and dispute amounts grow larger.
ALFRED IP, founding partner, Hugill & Ip
In my experience, clients always expect a high level of certainty for legal services, from the advice that they seek to the price that they pay for the advice. In most of the non-contentious matters, such as drafting and advising on a legal document, experienced lawyers should be able to provide a fee quote and adhere to the same.
If there are any unforeseen circumstances leading to an escalation of time spent and change of quotation, they should inform the clients immediately. Clients hate surprises as much as lawyers! This is particularly the case when we are talking about legal services which are highly commoditised, such as will writing (although we have litigated a lot of those wills), when the decision-making process is highly driven by price. To stay competitive, we need to educate our potential clients that we are providing an extra level of services to do a proper job for them, and therefore, our fees may not be the lowest in the market.
For some of our legal services that we cannot provide a fixed fee quote, e.g., in contentious legal proceedings, we may consider flexible payment arrangement, taking into account clients’ financial means and resources. In Hong Kong, we cannot enter contingency fee arrangement with our clients, but we can certainly consider payment arrangement such as monthly instalments. We also consider it part of our job to provide a high level of transparency in our billing process and a regular billing cycle for our clients to understand and settle their bills.
