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The Freshfields ‘£1,000 an hour’ partner: row breaks out over how much top firm charges

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Barrister MP reckons magic circle giant demands up to a grand for 60 minutes of its time

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A row has broken out about how much venerable law firm Freshfields charges out its top partners for.

According to Conservative MP and 7 King’s Bench Walk barrister Stephen Phillips QC (pictured below), the magic circle giant billed a senior hotshot out at £1,000 an hour on the government’s recent £757 million sale of its 40% stake in Eurostar.

QC

At a Whitehall Public Accounts Committee meeting this week, Phillips — who has faced criticism for the huge commercial barrister earnings he hauls in on top of his MP salary — expressed concern at Freshfields’ “Rolls Royce” level fees, before claiming:

I’ve no doubt that Freshfields did a super job at £1,000 an hour for a partner. But did you put it out to tender?

But the firm itself maintains this figure is incorrect. In response to Phillips’ comments, a Freshies spokesperson told The Times:

No partner charged £1,000 an hour on that deal. And where the work can be scoped appropriately, the firm offers a number of alternative fee arrangements, including fixed fees.

National Audit Office data shows that Freshfields earned £2.8 million from the Eurostar deal.

According to research by law firm costs expert Jim Diamond, the five magic circle firms charge out their partners for between £775-850 an hour, while the London offices of US firms will go slightly higher, to as much as £900.

Junior lawyers are much cheaper — but still not exactly cheap — with an hour of a magic circle newly qualified solicitor’s time costing £350 and a mid-level associate boasting an hourly charge-out rate of up to £575.

27 Comments

Not Amused

Let’s not extend this to state interference in the market.

But concerns over what the state pays directly are relevant. Why bother with the Government Legal Service at all? The theory is that they save costs, but in reality external lawyers are constantly consulted.

This is an area where cuts should fall – then we could preserve frontline services. Administration, consulting (including lawyers) and civil service process – cut cut cut. Let’s make our savings there.

(21)(3)

Anonymous

Are in house lawyers pointless because outside counsel are instructed all the time? It seems extremely strange to suggest that private companies know how to manage their business, and then say that the only way for the government to do anything is to pay enormously over the odds for outside counsel. It’s not as if the work to do would suddenly shrink. All that would change is that a salaried £50,000 GLS lawyer’s work would have to be done by external counsel for £500/hour. That would be a horrible waste of resources.

(5)(0)

Not Amused

Well, firstly, the flaw in your premise is in assuming business is well run.

Secondly, outside counsel needn’t cost £500/hour. The government should use regional lawyers who are incredibly cost effective.

Thirdly, I question whether the work of the GLS would be replicated by outside counsel. Or rather I expect it is being replicated already.

I don’t mind which the government does, it can either:

1) Abolish all public sector lawyers, use only outside counsel and effectively manage procurement; or,
2) Ban all use of outside counsel, create a large internal department (nationalised law firm) of lawyers and have them address all needs.

Because at the moment I have the highest deficit in the western world. I have a need for huge costs and I see the public paying twice for legal advice for the public sector.

(2)(6)

Anonymous

Just as any other organisation, you need in house employed lawyers for day to day work, and external counsel for specialist advice, one-off issues, or projects. Whether the balance is correctly struck is a debate that could be had, although I’m not sure either of us can intelligently comment on that. I certainly don’t do government work. Your absolutist position is attractive for its simplicity, but it obviously doesn’t reflect the reality of legal services and is a rather ridiculous view to post in a place where law students with no practical experience might pick it up as being sensible. If someone walked into an interview and told me that a huge organisation would be better off firing all of its lawyers and only using external lawyers, or to never use external lawyers at all even when faced with complex litigation or a major project, I would be rather suspect of that person’s commercial awareness.

(9)(0)

Not Amused

It is true that commercial awareness as defined by lawyers can include maintaining the status quo.

However it is patently risible to suggest that merely because something is done a certain way today, that it will be done that way tomorrow, or indeed that it should be done that way at all. Many business do not operate the way you suggest that they do. Big business is often the first to admit (privately) that it has structural problems.

Fortunately the young people will have the benefit of both your innate conservatism and my incitement to question.

(0)(6)

Quo Vadis

“Ban all use of outside counsel, create a large internal department (nationalised law firm) of lawyers and have them address all needs.”

A large internal department of lawyers – you mean a Service, dealing with Legal matters, and serving Government? Hmm, funny turn of phrase that, can’t think what it reminds me of…

(5)(0)

K

I think he meant for government work only, ban use of outside counsel acting for gov. Gov. must then solely use its GLS lawyers, whose numbers have been bolstered. I think that’s what his option 2 was getting at

(0)(0)

Agree with NA

Will common sense ever prevail?

(2)(2)

Quo Vadis

Having worked in a variety of public and private sector bodies, I can tell you that administration is the very last thing you cut. You would be amazed how much administration it takes for a doctor to see a single patient, a barrister to see a client, and so on. Even MPs; for all their high-minded talk of ‘cutting back-office’ jobs, it is their own back office who will have sorted out the myriad constituency tasks that allow them to prance about in front of the cameras or, in the case of Stephen Phillips QC, make a very fat living from jobs on the side.

(1)(0)

Anonymous

Given the government always include VAT in figures quoted for monies paid as legal aid to counsel, isn’t it likely that the hourly figure is (e.g.) £850 plus VAT? The hourly rate inclusive of VAT would then top £1k.

(7)(0)

Anonymous

If you don’t want an expensive firm…don’t hire Freshfields?

(19)(3)

The Marquess of Grimsby

In bygone times (i.e. 1986), I knew of a Fellow of a particular Cambridge college – this shall remain unspecified – who charged his own LLB students £500/hour for additional tuition in a rented out oaken room. The oak was of the highest calibre and, for this reason, the fee was a small price to pay.

By the same token, any firm providing well-oaked legal services ought to charge as much as they deem reasonable. Listen here! The United Kingdom is a Liberal country with freedom brimming over like the bubbles at the zenith of an abundant glass of Trappist Beer. Such Liberalism by its very nature entails the negative right to not to have salaries capped by the nanny that is the State. Oh why! Oh why! Surely Jeremy Corbyn is the sole, or at least the dominant, cause of this newfound lack of Liberty pervading dear old Blighty.

Yours despairingly,
Grimsby

(10)(4)

Cantab

Cambridge undergraduates work towards a BA (Hons), not an LLB, you pleb

(13)(2)

pdejonge@legalbenchmarket.com

The Government should have anonymously tendered this work. This would have reduced the bill by 30-70% as blind tenders always do. However government officials and GCs of large companies still think they can do this themselves, quod non. They and their governments /companies fall victim to “Reputation Billing”. See p 85,86 of J.Bosman’s Death of a Law Firm

(1)(1)

B'stard of Counsel

You get what you pay for.

Consequently I prepare my Legal Aid Mags cases on the train, whereas I prep my £5K per day private Crown Court briefs when I should be sleeping.

(9)(2)

Mr Pineapples

Hey mate – don’t be so bleedin’ cynical

(2)(0)

anon

Freshfields in Moscow was charging @ €1200/hour as far back as 2004.

(8)(0)

anon

At least two tax QCs in London regularly charge as much as £5000 per hour.

(4)(0)

Mr Pineapples

Perhaps Mr Gove needs a think about this one. This is public money being spent on legal services. Everytime that partner takes a waz we, the tax payer, are charged £200 and this racks up to £500 for a dump.

That is way to expensive.

(3)(2)

Anonymous

You take 12 minutes to take a piss? 30 for a dump? I’d see a doctor if I were you!

(7)(0)

Anonymous

That probably includes travel time to and from the lavatory, as well as reasonable expenses for refreshment en route, wiping time and paper.

(1)(0)

Anonymous

I thought we all know the game is for private firms to rip off the government? Why else do private firms work with the NHS?!?!

(1)(0)

Happy Client?

Sounds like they were good value though. Civil Servant in charge of Eurostar sale said:

“We should recognise is that the transaction itself was probably one of
the cleanest I have seen, in that the residual risk to Government was almost non-existent. The reps and warranties were almost non-existent; I think that goes down to the due diligence work that
Freshfields did and the way that they handled the transaction….”

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/sale-of-eurostar/oral/24631.pdf

(7)(0)

Happy Client...

Seems they were worth the £ though? Roger Lowe the Civil servant in charge of Eurostar said:

‘Freshfields came up with the best bid. One thing we should recognise is that the transaction itself was probably one of the cleanest I have seen, in that the residual risk to Government was almost non-existent. The reps and warranties were almost non-existent; I think that goes down to the due diligence work that Freshfields did.’

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/sale-of-eurostar/oral/24631.html

(5)(0)

Flapping Potato

Well, boys and girls, yes, that’s right! It’s nearly time! It’s Sunday evening and tomorrow is Monday and we can all look forward to another fine week of top legal news and goss from the kids at Legal Cheek!

In a single bedroom flat in Hackney, we find Not Amused starching his shirts and rolling his amber leaf ciggies under a tasteful watercolour of Jack Straw. He smacks his lips in anticipation of the single fried egg he hopes to eat before 11pm. He enjoyed his Sunday this week. Three backflips completed in his building’s lift and 14 Tesco bags filled with strawberry jam before 11am.

In a grand maisonette in Blackburn we find Lord Harley prepping his submissions for his case at the RCJ tomorrow as he whistles the tune to Animal Hospital. He slaps his thigh cheerily to keep the beat.

In time we visit all the homes and hovels of all the keen readers of Legal Cheek. But before, we visit the office of the magazine itself!! Yes that’s right, it’s Alex’s bedroom at his mum’s house in Leeds! What absolute nonsense do those cheeky chappies have in store for us this week? You’re in luck tonight because we’re getting a preview!
1. Yet another Charlotte Proudman article!
2. Er that’s it.

(8)(0)

Anonymous

Don’t forget the mum jokes and swimming pool shitting jokes alongside Stunning Photo jibes.

My favourite is the Briana references.

(0)(0)

Anonymous

And, yet, here you are!

(0)(0)

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