Solicitors’ payments on account refer to the advance payments made by clients to their solicitors to cover anticipated legal costs and expenses. These payments are generally made before the work is carried out, and they are held in a client account until the work is completed or the expenses are incurred.
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This article looks at when you might be asked to pay solicitor fees upfront, where they are kept, and much more.
Do all solicitors ask for payment on account?
Solicitors may ask clients to make payments on account for a variety of reasons, such as to cover court fees, expert witness fees, or other disbursements. These payments may also be required to cover the solicitor’s fees, which may include hourly rates or fixed fees.
Payments on account are typically requested at the start of a legal matter, and the amount requested may vary depending on the complexity of the case and the expected costs. At the outset, solicitors are required to provide clients with an estimate of the likely costs involved in their case, and to update clients regularly on any changes to these costs as the case progresses.
Where is the payment on account kept?
Payments on account made by clients to solicitors are typically held in a client account, which is a separate bank account used to hold client money. Solicitors are required by law to maintain a client account, which is subject to strict regulations and rules.
The Solicitors Regulation Authority (SRA), the regulatory body for solicitors in England and Wales, has set out rules governing how solicitors should manage client money held in a client account. These rules require solicitors to keep accurate records of money held in the account, to ensure it is kept separate from the solicitor’s own money, and to use it only for the purpose for which it was intended (e.g., to pay for the legal costs and expenses of the client’s case).
Until the solicitor bills the client for the work done, or disbursements paid on their behalf, the money still belongs to the client. Where any interest is earned, who receives the benefit of this depends on the amount, and the contractual terms of the retainer and how long it remains in place.
What is a Retainer?
A retainer is a fee paid to a solicitor or law firm to secure their services for a specific period of time or for a particular legal matter. Retainers can be structured in different ways, depending on the nature of the legal services being provided. For example, a solicitor may require a retainer to be paid in advance for ongoing legal services, such as providing ongoing advice or representation in a court case. In other cases, a retainer may be paid as a lump sum to secure the services of a solicitor for a particular legal matter.
The amount of a retainer can vary depending on the solicitor or law firm, the nature of the legal matter, and the complexity of the case. Typically, retainer fees are paid upfront before any legal work is carried out. The fee may be a fixed amount, a percentage of the total projected legal fees, or a combination of the two.
What happens if I don’t make a payment on account when requested?
Failing to make a payment on account to your solicitor as requested could have several consequences. Your solicitor may:
- Be unable to proceed with the legal work until the payment is made. This could cause a delay in legal proceedings, which could have negative consequences for your case.
- Decide to withdraw their services. This could mean that you will need to find another solicitor to represent you in your case, which could be costly and time-consuming.
- Charge additional fees for the extra time and effort required to chase the payment or to deal with any resulting delays.
- Take legal action to recover any amount owing. This could include issuing a court claim against you, which could result in additional costs and fees.
It is important to communicate with your solicitor if you cannot make a payment on account as requested. Your solicitor may be able to work with you to find a solution or to adjust the payment schedule to accommodate your circumstances.
What is a bill on account?
A bill on account is a type of invoice that solicitors or law firms send to their clients for work that has already been completed or services that have already been provided, but for which the final amount due has not yet been determined.
A bill on account is usually sent when a solicitor has provided legal services over an extended period, such as in a long-term legal matter. Instead of waiting until the end of the matter to invoice the client, the solicitor may send interim bills on account at regular intervals, such as monthly or quarterly. The purpose is to keep clients informed of the work that has been done and the costs incurred so far. It also allows the client to make payments on a more regular basis, rather than receiving a large bill at the end of the matter.
Typically, it includes a detailed breakdown of the work done and the expenses incurred, along with the amount due and the due date for payment. The final amount due will be determined once the matter is concluded, and any payments made on account will be credited towards the final bill.
It is important to review bills on account carefully and to raise any concerns or questions with your solicitor promptly. This will help to ensure that the billing is accurate and that you understand the charges being incurred.
What happens to any unused money?
At the end of the case, any unused funds held in the client account will be returned to the client. The solicitor may deduct any outstanding fees or expenses owed to them from the funds held in the client account, but they may not use these funds to pay their own fees or expenses unless they have obtained the client’s permission to do so via the provision of a bill.
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