HM Courts and Tribunals Service (HMCTS) has updated its guideline hourly rates for solicitors, with a recommended 2.28% increase effective from 1 January. The increase will see the top hourly rate (a grade A fee earner in the London 1 category) rise to £579, with the lowest rate (grade D fee earners in the National 2 category) at £142.
Master of the Rolls Sir Geoffrey Vos, who is also the head of Civil Justice, said of the increase:
“In 2022, I requested that the Civil Justice Council take a strategic look at costs. I have now implemented the Council’s recommendation to update guideline hourly rates for inflation.
“In January 2024, figures were uplifted using the service producer price inflation (SPPI) figures from Q1 2022 – Q1 2023 inclusive. This amounted to a 6.66% increase.
“These figures are now to be updated using more recent SPPI values, to cover up to Q1 2025. The uplift from the 2025 rates to the new 2026 rates amounts to an increase of 2.28%.”
In June last year, research from the Legal Services Board found the price of legal services is rising, but the transparency of pricing is improving – particularly amongst firms offering fixed fees.
Shaun Jardine, the former CEO of a top 200 law firm, believes fixed fee models and value-based pricing benefit both solicitors and consumers. In an interview with legal software company Osprey Approach, Jardine explained why most clients dislike being charged hourly.
“If you give clients a choice of fixed prices they’ll love you for it. So the decision to ditch the billable hour is client-led first of all,” he said.
“Clients don’t care about the process. They care about whether they’ll be able to move into their dream house before half term; they care about getting out of a relationship so they can be happy again.”
Rather than focusing on detailed time recordings, Jardine suggests solicitors should offer fixed-fee, value-based pricing to offer certainty for both parties. He explained:
“When I ask lawyers what clients buy from them, they’ll often say, ‘my expertise’ and it’s not. They’re buying the outcome. Everyone assumes that most people want the cheapest price, but that’s not the case. We don’t all buy the cheapest bottle of wine, car, or clothes.”
With value-based pricing, he added, there is a “three-way triangle of happiness”.
“Clients are happier with their options, lawyers are happier (which is key for the current battle for talent) and the business is more profitable as a result.”
Last July, the Legal Services Consumer Panel (LSCP) urged regulators to identify ways in which high quality and affordable legal services can be made available to consumers, after its annual Tracker Survey found the number of people ‘unbundling’ legal services were at a record high.
One in five consumers were found to be dividing tasks with solicitors to keep bills down – a figure LSCP chair Tom Hayhoe described as “scandalous”. He added:
“Innovative and affordable delivery models are no longer optional; they are essential to ensuring everyone can access a level playing field, not just those who can foot the bill.”
