By Jonathan Rayner


Soaring City fee rates are forcing increasing numbers of European companies to move their business away from London, a top in-house lawyer warned last week.



The comments by Jean-Claude Najar, co-chairman of the International Bar Association's (IBA) Corporate Counsel Forum, came as it emerged the London branch of the Commerce & Industry (C&I) Group has set up a fees focus group 'to bridge the disconnect between the added value provided by a law firm and the fees they are charging'.



Speaking to the Gazette at the IBA's annual corporate counsel conference, held in London, Mr Najar said the Square Mile has many of the best lawyers in the world. 'But the fact remains that working with solicitors and barristers in London is an expensive proposition - and some senior European lawyers have begun rejecting the possibility out of hand,' he said.



Mr Najar said members of the Paris bar and elsewhere have told him that 'London is simply too expensive'. There have been 'persistent rumours and mutterings' about the cost of City solicitors.



The group set up by the London C&I held its inaugural meeting last week, with representatives from the financial/insurance, travel, manufacturing and IT industries. Co-chairman Nils Breidenstein, general counsel at software company BEA Systems, said that with top firms charging up to £750 per hour, it was 'time to have a serious discussion about fees'.



Mr Breidenstein said companies are increasingly seeking alternative arrangements, such as fixed fees, staggered fees and 'quick advice' fees (where firms are asked standard questions they can answer immediately). He added: 'We haven't quite got to "no win, no fee" - but some of the arrangements are related.'



David McIntosh, chairman of the City of London Law Society, argued that London lawyers' rates are governed by the marketplace. 'There seems to be a vast number of people who think they get value for money,' he said. 'Every client is concerned about legal spend, but where a big transaction comes up that is important to the client, they go to the best - it is not just about money.' He added that lawyers' bills are not 'out of synch' with those of accountants and other advisers.