The defendant costs specialists

Good times for costs firms?

By on Dec 9, 2016 | 3 comments

The majority of industry news concerning the costs profession comes from the pages of Costs Lawyer magazine and the Association of Costs Lawyers’ regular email bulletins.

Reading these gives the impression of a profession in glowing good health with announcements of firms opening new offices and regularly taking on new staff and recruiting key personnel.

It is understandable that costs firms wish to promote their good news stories.

It is therefore something of a change to see the Law Society Gazette announce a prominent costs firm with apparent cash-flow issues and the fact they have recently closed two of their four offices and reduced their headcount from 110 to 70.

This is hardly unique and the last year or two has seen a number of firms close offices, costs teams being disbanded and redundancies made.  There has also been an increasing number of mergers and takeovers.  One suspects a large number of these mergers/takeovers have been driven by the need to survive as opposed to being positive attempts to expand.

It is not clear to what extent this is hitting the pockets of individual costs lawyers or law costs draftsmen, although it will clearly be impacting on many who own their own costs firm.  Given much of the reduction in workloads will have been from increases in low-value claims attracting fixed fees, one would expect these changes to have been initially felt by those less skilled costs workers who were probably the first to be let go.  On the other hand, one reader recently suggested to me that the number of advertisements appearing in Costs Lawyer magazine for experienced costs lawyers (with corresponding salaries) has been declining and those jobs still being advertised are for more junior staff.

I wonder whether any of those who confidently predicted Jackson was nothing to worry about and suggested it would bring wonderful new opportunities are now starting to re-evaluate matters.

    3 Comments

  1. Agreed they live in a parallel universe and ignore the facts namely that work is shrinking fixed fees are expanding the new bill will require technology and still take longer to prepare (for which paying parties will not want to pay more than they do now)and we will soon end up with a supermarket (of merged businesses) and corner shop scenario (of the few small firms who survive, there is no future for new recruits or the ACL. Luckily I saw the best of the last 40 odd years and am now only slowly withering on the vine until there is nothing left to do……..

    brian varney

    9th December 2016

  2. Time will tell.

    All of the civil reforms seem to be ‘we’ll throw this section under the bus’ and you’ll get this if you don’t moan.

    It seems that budgeting for multi-track costs lawyers was the trade off for fixing costs in other cases and for provisional assesssment. I mean, from a financial point of view, who wouldn’t want to get paid for doing a budget win or lose; then get paid for a budget hearing; and then get paid for doing a bill at the end of the case.

    We’re now looking at the extension of fixed costs in parallel with a much more complicated bill format. So less cases, less bills, but more time on the bills.

    Budgets and complex bills burden civil cases further. I will be unsurprised when they are scrapped.

    You can’t look at it objectively without thinking it’s daft.

    Rob Pettitt

    9th December 2016

  3. Speaking as an experienced draftsman at a national costs firm (not the one referred to in the main article), I can echo that the sector appears to be in terminal decline. We have lost probably 1/3 to 40% of our draftsmen since the Jackson reforms. While I used to be bombarded with several e-mails and phone calls per week from head-hunters, I haven’t had any approaches for a number of months.

    Whilst my salary is yet to suffer, it can only be a matter of time. Once that happens, there will be a rush of draftsman trying to get out of the industry and into something else.

    Costs Draftsman

    13th December 2016

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