When a listed law firm has to report to its investors on the value of its key asset – its WIP – the above scenarios can put pressure on the firm and its lawyers. Lawyers will have targets to resolve a certain number of cases per month or per quarter, and convert that valuable WIP into cash. Lawyers (and sometimes support staff) will have daily time recording quotas to ensure that they boost the firm’s WIP, and therefore its balance sheet, by a certain amount each day. Whilst a lawyer’s primary duty is to the Court and then to the client, it is therefore easy to understand why lawyers can feel like they are between a rock and a hard place when they are pressured to settle cases, bill a certain amount of time to files per day, and convert as much WIP to cash as possible, if their cases aren’t ready for settlement or can only be resolved on a compromised basis.
Large listed law firms such as Slater & Gordon and Shine Lawyers may also feel pressured to keep its liabilities low, such as the amount it spends on disbursements. Disbursements are the expenses that lawyers have to incur to successfully run a claim, such as the cost of police reports, clinical notes, and medico-legal assessments. Disbursements usually run into the thousands of dollars per file, which is a large dent on the balance sheet shown, and ties up much needed cash. It is for these reasons that many law firms are starting to use third party ‘disbursement funding’ to pay for disbursements. This means that rather than the firm paying for the disbursements out of its own pocket, the client has to take out a loan to pay for disbursements. This loan is usually repayable at the end of the case, with interest. Whilst the disbursements themselves are usually recovered from the losing defendant, the interest charged generally comes out of the injured client’s compensation.
Whilst these are pressures at larger law firms, my firm, Stacks Goudkamp, does things differently. At Stacks Goudkamp my lawyers do not time record, so they do not feel pressured to charge a certain amount to client files every day. We don’t pick and chose the work that is ‘easy’ to bill for, and put off the trickier jobs for another day. We simply concentrate on getting the job done. Plus we are a boutique personal injury law firm, so we don’t just get the job done – we do it with excellence.
I also don’t ask my clients to pay for their own disbursements up front or to take out a loan. I know how financially stressful life can be after an accident, and do not want to add to my clients’ stress with loan paperwork. My firm covers the cost of disbursements, no matter how expensive they are.
In my forty years of experience, I know that insurers can be difficult and sometimes it is in a client’s best interests to accept a compromise. Unfortunately the costs recovery system is not favourable to Plaintiffs, and sometimes the net result of the cost of continued litigation for a slightly higher damages figure means that a ‘bird in the hand is worth two in the bush’. I explain this to clients and don’t pressure them to continue with a case when I know that the likely beneficiary will be me from increased costs, rather than the client. Instead, I personally and my firm have an excellent reputation for charging clients reasonable fees and providing a high quality service.
Finally, as Managing Director who actively works on my clients’ cases, if my clients ever wish to discuss the level of fees (which is rare but inevitably happens from time to time), they can speak to me directly and not have to go through a process to speak to someone with enough authority to make a decision. That person is me!
So if you have the misfortune of being injured in an accident and have to consult a personal injury lawyer, remember that biggest is not always best. Find out the size of the firm, how it is structured, and if they have the resources and expertise to get you the best possible outcome. There are lots of great lawyers out there, in firms big and small. The most important decision for you is that you find someone that you trust. If you think I could be the lawyer for you, contact me today on 1800 251 800
or make an online enquiry for a no obligation consultation about your claim.