Fixed price v hourly fees – A potentially expensive mistake?

Having supported thousands of families through the estate administration process, we know that one of the most popular features of our 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.

Here's an example of a case that demonstrates just how much security a fixed fee service can provide. We were contacted by a lady who asked us to provide a quote to administer the estate of her father-in-law. Our team was able to conduct the quote over the phone, simply by asking a couple of questions about the estate which allowed us to understand the work involved.  The estate was a fairly complex one to administer, so we 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. 

Several months after our initial conversations,  we were contacted by the family to tell us that their legal bill had just exceeded £7,000; the bad news for them was that the estate was nowhere near completed and was likely to require several more months of work. Unfortunately, as the process was underway we were unable to step in to try to help. 

This example just highlights the difference that can exist between fixed fees and hourly rates. Unlike the service offered by many traditional Solicitors, our 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. 

Unfortunately, it is quite common that families appoint the first Solicitor or estate administration provider that they come across.  This often means that they end up paying more for a service that that can be difficult to understand. 

At Kings Court Trust, we take the time to explain how the estate administration process works and provide a guaranteed, fixed price quote before any work is undertaken to ensure fairness and transparency.  For more information on our services or if you have any questions relating to the estate administration process, contact our client services team on 0300 303 9000.