An alarming trend in which law firms engaged in cutthroat competition for clients are under-quoting for services has prompted the Law Society of Kenya to write to its members. The price war, currently prevalent in the banking industry, involves the client setting up its own remuneration structure for advocates below the rates provided for by the Advocates Remuneration Order.
Made by the Chief Justice, the Advocates Remuneration Order sets a scale designed not only to protect the client from being overcharged, but also to prevent advocates from engaging in price competition. It is based on the belief that if advocates undercut one another, they will eventually compromise the quality of services they give to the client.
Law was a vocation practised for free
It is also based on the presumption that since one lawyer is as good as the next, there is a basic minimum standard of service no matter the lawyer. The Chief Justice puts a value to that minimum standard and the Law Society decrees that no lawyer should charge below the amount set. If any lawyer were to lower his charges then, invariably, he would have to lower the quality of his service below the minimum standard.
But these are the assumptions from another century. If you go farther back actually, there was a time when lawyers would not charge for legal services. Law was a vocation practiced for free. The most a lawyer hoped for was a gift from a satisfied client. And that is why the gowns lawyers wear to court have a pocket hanging from the back, Satisfied clients would approach the lawyer and put in what they could afford as a gift for a job well done.
Refusing to be constrained by unilateral legislation
Today, we are a market oriented economy in which virtually everything is for sale, including prayers. Nobody practises law as a vocation anymore. It costs no less than Sh100,000 to set up the smallest law firm in the most dingy street. Large upmarket law firms have a fixed asset capitalization in excess of Sh10 million. Law firms are so varied in their size, structure and operation that they totally defy all the assumptions on which the profession grew. The market has identified these varieties and adjusted itself accordingly. The market is more concerned with the quality of the services at an affordable price, rather than the historical presumptions of a gone era. Clients are asking “why pay more?”
There are many arguments in favor of clients refusing to be constrained by unilateral legislation that the profession has placed upon itself. The most cogent is possibly that the nature of legal work and the quality of legal services has changed so drastically that it cannot be regulated anymore. With the coming of computer technology, any lawyer can create a mortgage, a debenture or other commercial document with little effort.
One hundred years ago, a lawyer drawing up a mortgage had much drafting to do after perusing stacks of documents. The lawyer had then to get an expert to write out the documents on special paper. In latter years, the lawyer required a copy typist to key in the 50 pages of the document and create three copies.
Today, you can create and print out the most complicated legal document in five minutes on a computer. It will not matter whether you do so in a one-room legal office on River Road or at the plush surroundings of a law firm occupying several floors in downtown Nairobi. The quality will be the same. The client therefore is justified in demanding that the benefits of technology be taken into consideration when fixing rates for legal services.
Condemned to pay huge bills they had no control over
But unlike legal documentation where the product is definite, court-room practice creates new considerations regarding standardised fees. It is chiefly that lawyers are paid win or lose. Even if the client loses everything in the litigation, he will pay on the same footing as though he had won. In a market economy, this is not only illogical but retrogressive.
This issue has been of particular significance in Kenya over the last decade when the country was held captive by a corrupt judiciary. Clients who lost cases for no fault of their own, felt doubly prejudiced by being condemned to pay huge legal bills that they had no control over.
A market economy demands a more predictable atmosphere. Clients want to make decisions on whether to go to court or not based on a cost structure that they have a say in. Every client should be entitled to retain a lawyer within his financial means if one is available.
Insist that the service be made more expensive?
There should be a leeway between the law firm as a business and the client to negotiate their financial relationship. If the client is satisfied about the quality of the service he is getting, and the lawyer is able to provide it at a much lower cost than his competition, on what basis would the Law Society insist that the service be made more expensive?
A market economy regulates itself. If the remuneration order were to make legal services too cheap, market forces would force the rates up. That is what is happening now in the matatu sector. Regardless of what the government is dictating, the market forces are demanding that transport be more expensive. And the travellers are paying.
The fact that the Law Society is concerned that many lawyers are providing their services at much less than the prescribed fee means that legal services in Kenya are over-priced. It is a futile war to dictate otherwise. The market economy is more powerful than the Law Society.
ln any event, the Advocates Remuneration Order is observed more in breach. Few private enterprises today pay lawyers according to scale. Few lawyers, conversely, have the confidence to tell their prospective clients that it’s the remuneration order or nothing. Even very large law firms, who would otherwise have the vested interest in enforcing the prescribed fee, are today offering legal services at scales way below that of medium-size firms.
It can only mean that Kenya is now in line with other developed legal jurisdictions who did away with remuneration orders ages ago. The market forces have defied the law. The lawyers are defying the society.
Rather than try to maintain a position that is clearly untenable, it may be better for the country and the legal profession in the long run if the Law Society led the way in adopting a more Iiberalised legal profession.