In House Legal – Outsourcing Litigation Work via Interim Lawyers

For small and medium sized companies making the decision to issue proceedings against a debtor or a supplier who has provided you with defective goods or a customer who is disputing the quality of your service, is very often a big decision. If the amount you are going after is more than £10,000 then you have the issue of being liable for the other side’s costs if you lose the case.

Similarly, if the amount you are going for is less than £10,000 you are unable to recover the costs of your litigation, which can make the use of an external solicitor very expensive indeed.

Furthermore, if you win the case but the other side decide to go into administration or bankruptcy then you will not get anything back at all, and suddenly a case that you were pursuing someone for £15,000 for can end up with you losing significant amounts of money in lost legal fees and court costs.

If you use an external law firm to undertake your litigation for you then the hourly rate you will be charged can start at £150 and head rapidly upwards to closer to £250 to £300 per hour for most medium sized solicitors firms who tend to know what they are doing, but charge you for the privilege. Some will offer monthly retainer options, and it can be a good idea to ask about these from the outset as it is a way of keeping costs down.

It is very difficult for any solicitors firm to provide you with a price for assisting with litigation as well, because the cases can vary widely in how much work they take.

Let me give you an example. We recently sued a solicitors firm for about £3500 plus VAT. The paperwork involved in that case came to about 95 pages. The witness statements, of which there were two, were about 12 pages long. The bundle (a court bundle is the paperwork needed to provide to the court and the other side for all the evidence in the case and the witness statements), was about 115 pages long.

We had another case worth around £10,000 that actually only had about 20 pages of evidence and a witness statement of 3 pages. The preparation that goes into court cases can be significant, but similarly you can also find that it doesn’t take long at all.

I have included these examples because it demonstrates the problem that solicitors firms have. They cannot predict how much time your litigation case is going to take, and as a result it is very rare to find a solicitors firm able to give you a fixed price for assisting you with your court case. This means that when you begin your case you have absolutely no idea how much your legal bill is going to be at the end of the matter. This makes it very difficult for you to determine whether or not it is worth even pursuing the case, and how much you are going to get back.

This problem in itself tends to lead some companies to simply fold any case as quickly as possible to reduce the risk of incurring huge costs and taking the risk that they may never see the owed money in any event.

There are ways of minimising your litigation costs and one of these is to use the Interim Lawyers platform to use the services of a locum or freelance solicitor charging you on an ad hoc basis at an hourly rate, usually in the region of about £45 to £70 an hour, but sometimes lower if the case is straightforward.

This solution is relevant to a locum working specifically for a business and in relation to a business debt, and cannot really be used by consumers as solicitors are precluded from acting on this basis without the correct insurance in place, whereas solicitors can contract directly with commercial entities on a business to business basis, with the business taking the risk in the event of any failings on the part of the solicitor. The usual term for this type of locum work is “In House”.

The other option is to try and agree a fixed price with your solicitors before the matter starts. I suspect most solicitors will refuse to give you this, simply because litigation matters can be so random in their complexity and time taken, but it is possible to get some firms to agree a fixed price based on the parties involved, the value of the case and the potential for recovery. As stated above, monthly retainers are an option.

If you use the Interim Lawyers platform you will in essence be getting your own solicitor acting in house on your behalf. An Interim Lawyers locum can provide you with full consultancy services on risk management, case preparation, strategies for resolving the disputes, minimising risk in recovery and full assistance with recovery of the amount outstanding.

The cost savings are substantial. If you use a firm of solicitors and they work for 4 hours preparing your case, then chances are the cost will be about £800 plus VAT at an absolute minimum. The same sort of price using the Interim Lawyers platform is around £200 (assuming the consultant is working at £50 per hour).

There are lots of services now opening up online charging fixed fees for about £150 to £175 per hour but the Interim Lawyers platform is still substantially cheaper and usually the service is the same. You may even find you get the same consultant or the same level of consultant working for you regardless of which service you use, but you will pay substantially more if you use one of the services that has been set up by one of the larger solicitors firms in the UK.

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