Advice agencies adopt conditional and contingency fees

Advice agencies have decided to offer conditional and contingency fees to employment clients, David Gilmore, director of LegalVoice, said yesterday.

He said that Rochdale Legal Enterprise, operated by Rochdale Law Centre, had been offering employment clients conditional fee agreements since it opened in April last year.

Gilmore said a similar Community Interest Company (CIC), which Islington Law Centre intends to open this summer, aims to offer employment work on a contingency fee basis. Unlike Rochdale, Islington's CIC has an ABS licence.

Speaking at the LegalVoice 2013 Conference on surviving LASPO, Gilmore, who advises law firms through his consultancy DG Legal, said: "There is little doubt that there is demand across the country for employment advice.

"Many advice agencies talk of receiving significant numbers of queries from potential clients that were hoping to get advice free of charge."

However, he warned that many people would probably be unaware that law centres were starting to charge clients and may be unwilling to pay.

Rochdale Legal Enterprise and Northampton and County's Community Law Service charge for immigration work on a fixed fee basis. Islington's CIC plans to charge using a mixture of hourly rates and fixed fees.

The Community Legal Service also offers a fixed fee debt management service and Islington hopes to charge for education work.

Gilmore said agencies could get a "competitive advantage" by charging hourly rates, particularly if they were £100 per hour or less, but demand for fixed fees was rising steadily.

He warned that conditional fees only made money where caseworkers won and warned that the relatively low level of employment awards would have to be factored in to any budgets or cash flow forecasts.

Gilmore advised agencies that lacked lawyers with experience of private practice to find a mentor from private practice.

He said it was essential that agencies wanting to charge had a marketing plan.

This could include writing to all clients seen by the service over the past 18 months, producing eye-catching posters and business cards, and using LinkedIn and Twitter.

"Low cost promotional items such as pens and coasters are usually not thrown away by recipients until the end of their useful life," Gilmore said.

However, he said "very cheap pens" should be avoided, in case clients drew unintended conclusions about the quality of service.

Gilmore said it was possible to design and build a "fairly respectable" website for between £1,000 and £2,000, and SEO courses would help ensure the site had a good ranking.

He concluded that it was "far too early" to say if the concept of charging by advice agencies was financially sound.

"I think it is viable, but I think it is possibly harder than many people think it is. In the private sector people already have the experience of providing paid-for services and there is a sense of entrepreneurialism."