Starting out: part 1

Perplexed over financial matters? The Young Bar Toolkit is here to help turn confusion to clarity, as the Young Barristers’ Committee explains in this two-part finance guide for the self-employed Bar

In the early years of practice, barristers are on a steep learning curve in all respects. 

 

Mindful of these challenges, the Young Barristers’ Committee and the Bar Council have created the online Young Bar Hub which hosts the ‘Toolkit’, providing tips to young barristers on how to build their practice. This two-part finance guide for Counsel is a distillation of just some of the plentiful advice hosted on the Hub, which also includes sections dealing with practice management, wellbeing and work-life balance, and employed practice. 

Managing finances – and relationships

A key area that must not be overlooked in those early years is managing finances and, if you are self-employed, ensuring you have a good relationship with your clerks and fee clerks.

Given the importance of barristers’ fees to their livelihoods, it should be made clear to you when you start out in chambers how your clerks and fee clerks operate. If in doubt, speak to a junior tenant who has been in practice for a year, a former pupil supervisor or another member of chambers you feel happy approaching about it.

How it works

When a brief fee has been agreed for a piece of work, you or your clerk should keep a written record of the date when that agreement was reached and who agreed that fee. Generally speaking, your clerks will agree this for you and most will note the position on the chambers’ diary system. It is good practice to be aware of how your clerks do this and where you can find the information, should you need it for any reason. Ultimately you are responsible for the fees agreed by your clerks (see rC22.1 of the BSB Handbook).

When it comes to billing, at the end of the piece of work or after the hearing, this is usually something, again, that the clerks will do for you. Billing is dependent on you reporting your hours or the completion of a piece of work to the clerks. Some chambers have a form that you complete; in others it is incumbent on you to tell your clerks (either by email or in person). It is important to keep your clerks up-to-date so that they can bill work on your behalf.

It is good practice to keep a written record for yourself, for reference. The likelihood of problems arising is low, but at least it means you have a note to remind yourself of how many hours you spent on a case and when you got paid, which might prove useful. In any event you must keep records supporting the fees that you are charging to comply with rC88 of the BSB Handbook.

Payment terms

Terms of payment will depend on the type of work that you are doing and whether the work is for a private client, insurance company or is publicly funded.

From 31 January 2013 the Bar Council’s Standard Contractual Terms apply. These can be found on the Bar Council’s website, along with helpful guidance. The Standard Terms do not apply where the barrister is paid directly by the Legal Aid Agency or by the Crown Prosecution Service. The Standard Terms also cannot be used for a CFA or where a lay client is to be a party to the contract. That said, the above link on the Bar Council website includes clauses that could be used to enable the Standard Terms to apply to civil legal aid cases. The Bar Council website also provides a standard template CFA.

The difference from the old way of working and the Standard Terms is that barristers can now sue for their fees. (We will deal with this in Part 2, in the next issue of Counsel.) The cab rank rule is also affected as you can refuse to accept instructions if they are on terms other than the Standard Terms or the terms of work which you (or your chambers) publicise as being the standard terms of work. This is set out in rC30 in the BSB Handbook.

If you do civil privately paid work then it is likely it will be on the COMBAR/CLLS Standard Terms. These provide for four different payment bases (Basis A-Basis D), plus the option of coming to another agreement. The most common basis is Basis B, where the solicitor endeavours to collect the barrister’s fee from the lay client.

Under the Standard Terms it is possible to state that an invoice should be paid within 30 days of delivery (clauses 12.4-12.6). In reality solicitors may seek longer payment dates. Also, there is every probability that payment will not arrive within the 30 days and, while interest will accrue and action could be taken, most barristers will take a tactical decision as to whether to pursue the fees or to wait.

Fee estimates

At the outset of a piece of work it is likely that a fee estimate will be required. The fee estimate is to tell the solicitors, and the lay client, how much the piece of work is likely to cost them. Often the fee will then be agreed – and that is how much you will be able to bill at the conclusion of the work. This is always a slightly difficult exercise, as it requires you to predict how much time you will take on the case. There will be cases which take an unexpectedly short length of time, as often as there are cases where something new and entirely unexpected comes up. The trick is to keep your clerks informed if anything unexpected arises.

All sets differ as to how the clerks and junior tenants agree fees. It is fair to say that problems can sometimes arise where there has been a misunderstanding between clerks and junior tenants – we are all human! Shown in the list, below, are some useful tips to make sure terms of payment are clear (these can also be found in the Toolkit). 

Relationship with fees clerk

It goes without saying that it benefits any young barrister to be on good terms with your fees clerks. There will be times when money will be tight or cashflow will not quite be working as it should. Most fees clerks will be very happy to help out, or to chase up fees which have been outstanding for some time. The important thing is to keep them in the loop. The best advice we can give is to not be afraid of your clerks or fees clerks; they are there to help you! If you co-operate with them, and show that you are grateful for the work they do on your behalf, your early (and later) years of practice will become markedly smoother.

Key contacts

Young Bar Hub and Toolkit 
Bar Council’s Ethical Enquiries/Remuneration Enquiry Service: email: Ethics@BarCouncil.org.uk; tel: 020 7611 1307

Contributor Louisa Nye is Chairman of the Young Barristers’ Committee

Clarity on fees and terms

  1. It is good practice for clerks to let a member of chambers know if either a capped or fixed fee has been agreed in relation to any particular piece of work. Usually, such a fee will only be agreed once the papers have been received and the barrister has given his view as to the length of time the work will take. Once the fee has been agreed, it should be confirmed to the barrister so that there can be no misunderstandings.
  2. If a solicitor asks for an indication of fees prior to sending papers, it is usually best for the clerk to ask the solicitor how long he/she thinks it is likely to take and to base any preliminary estimate on that information. It should always be made clear that this will need to be confirmed once the papers have been received and reviewed by the barrister.
  3. Fees sometimes cannot be based on time spent as there may well be a ‘price for the job’ either because of the source of the work, the value of the claim, or because it is a ‘loss leader’ to secure that case or future work. It is always helpful for the clerk and barrister to discuss the rationale for the fee level in these circumstances. If the reason is a one-off, then obviously this should be explained at the outset.
  4. If it is proposed to take on a new case which will involve a significant amount of work at a rate below a barrister’s usual hourly rate, it is good practice for the clerk to discuss the pros and cons with the member of chambers before committing them to the case.
  5. Once a capped or fixed fee has been agreed it will be almost impossible for a higher fee to be charged unless the scope of the work has changed significantly and this is brought to the solicitor’s attention as soon as it becomes apparent. Solicitors often pass fee estimates on to their clients and will be very reluctant to go back to them to explain why the fee claimed is higher unless there is very good reason. It can often damage the relationship with the solicitor if estimates are regularly exceeded without an obvious justification.

Carolyn McCombe, Chief Executive of 4 Pump Court

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Louisa Nye

Louisa Nye is Chairman of the Young Barristers’ Committee of the Bar Council for 2016. She was Called in 2007 and practises at Landmark Chambers. She specialises in property law and landlord and tenant.