Fixed price v hourly fees – A potentially expensive mistake?

Having supported thousands of families through the estate administration process, Kings Court know that one of the most popular features of their comprehensive estate administration service is the fact that it is offered with a guaranteed fixed price.  However, there are many other providers who charge an hourly rate – so what’s the difference between the two options and will choosing one over the other make that much of a difference to the final bill payable by the family?

Many high street solicitors still operate a traditional ‘time and expenses’ model.  This simply means that they charge an hourly rate for any time they spend working on the estate – typically between £175 and £250 per hour, although this can be more in certain parts of the country.  While this means that you will know how much their time will cost per hour, how do you know how long they will need to spend working on the estate?

Unfortunately, that is much more difficult to calculate.  Administering an estate can be a very complex task and it’s often the case that the full extent of the work required is only known once you have begun the process.  This means that if a solicitor uncovers additional assets that need to be dealt with part way through the administration, they will need to spend more time on the case which will result in higher fees being charged.  As a result, the estimated fee quoted at the start of the process and the final fee charged to the family can end up being very different.

One recent case demonstrates just how much security a fixed fee service can provide. In the summer of 2016, Kings Court were contacted by a lady who asked them to provide a quote to administer the estate of her father-in-law. The Kings Court team was able to conduct the quote over the phone, simply by asking a couple of questions about the estate which allowed them to understand the work involved.  The estate was a fairly complex one to administer, so they quoted a fixed fee of £7,000 for a full estate administration service.

After discussing the quote with her family, the lady decided to appoint a local solicitor.  He told her that he would administer the estate for an hourly rate which sounded like better value than the fixed fee quote provided by Kings Court Trust.

These initial conversations took place several months ago.  We’ve recently been contacted by the family to tell us that their current legal bill has just exceeded £7,000; the bad news for them is that the estate is nowhere near completed and is likely to require several more months of work. Unfortunately, as the process is underway so there’s no way Kings Court can help.

This example just highlights the difference that can exist between fixed fees and hourly rates. Unlike the service offered by many traditional solicitors, Kings Court’s comprehensive estate administration service comes with a guaranteed fixed price that is agreed up front with the customer.  This means that the family have complete peace of mind in knowing that the cost of the service will not change, regardless of the complexity of the case or the work involved.

Tom Curran, Chief Executive at Kings Court Trust, commented: “Unfortunately, it is all too common for us to hear of families appointing the first solicitor or estate administration provider that they come across.  This often means that they end up paying over the odds for a service that they don’t fully understand.  We don’t believe this is fair for the family, which is why we take the time to explain how the estate administration process works and provide a guaranteed, fixed price quote before any work is undertaken.”

It is for these reasons we have partnered with Kings Court Trust so you can get the peace of mind that their end-to-end service provides, in addition to which it is around 15% below that a solicitor would normally charge, which means there’s more left in the Estate to distribute to beneficiaries.

Contact us to find out more about their service and/or a brochure on what to do when someone dies