As the scope of services that lawyers provide has broadened in the past few decades, so too has the basis on which lawyers charge fees for their services. No longer do lawyers charge purely on the basis of time, although in most jurisdictions this is still one of the main measures by which lawyers value their services. Instead, many different fee options are used, including fixed fees and fees that are determined by reference to the value of the services that the lawyer has provided and now also contingency fees.
Increasingly, jurisdictions around the world are permitting lawyers to adopt a broad range of fee structures in both contentious (e.g. litigation) and non-contentious matters. Litigation is more sensitive, and therefore subject to more restrictions than non-contentious matters. The reason for this is that the costs of litigation are high, often beyond the payment ability of the parties. This gives rise to concerns about access to justice and highlights the need for a system of legal aid. In addition, in jurisdictions where the losing party is responsible for paying the costs of the winning party, the costs of litigation are often unpredictable and can be punishingly high. This has led to the emergence of legal expenses insurance to cover the expenses of litigation.
A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at law.asia.