Companies rap 'high rates'

SURVEY: 50% of directors claim that services from solicitors are 'poor value for money'

Solicitors are failing to give corporate clients good value for money when providing legal services although many admit their lawyers do provide a high-quality service, a survey of company directors published this week has revealed.

The survey of 313 members of the Institute of Directors (IoD) - mostly in smaller companies - found that 50% of respondents considered they were getting poor value for money from their lawyers.

Many said charging rates were too high and that work was charged at a uniform cost regardless of complexity.

The report's author, Richard Baron, deputy head of the IoD's policy unit, said the remedy for concerns about high charges for straightforward work was probably to ensure greater transparency in charging structures.He added that with the advent of e-commerce, companies would be better able to shop around for legal services.

Despite the concern over the cost of legal services, the survey found that 66% of respondents said the work done was of a high standard; 28% said it was not.

The good news was tempered by the fact that respondents said external lawyers often gave advice which was 'not definite enough' and was sometimes purely 'by reference to the law without taking business realities into account'.

Philip Hyde, managing partner of Norwich firm Steele & Co, which has just completed a separate survey of regulation of small and medium-sized enterprises, said: 'If [companies] feel they haven't had value for money, they probably didn't determine overall levels of pay through negotiation at an early stage when these problems can be overcome.' The survey also revealed that the companies surveyed used external lawyers regularly in only 27% of business contracts, 20% of employment matters and 14% of cases involving conveyancing, intellectual property and company law.

Otherwise they used in-house lawyers.

Sue Allen