Legal Billing - Differences between Germany and the US (Part 2)

And on we go - one part of the legal billing that has always been treated differently, is the one surrounding criminal matters and administrative fines. Historically legal work in the area of criminal matters and administrative fines was considered a part of the legal practices that require a different approach and therefore should follow a different billing-philosophy. Having said this, for decades the billing in this field would not take into consideration the amount of time and preparation that was needed in preparation as well as presentation before the trial, but mainly the trial itself. All that was changed with the 2004 changes in the RVG; criminal matters are now contained in part 4 of the RVG annex. Here it is determined that in addition to a procedural fee, a basic fee has to be set for the process to get familiar with the matter, and one in case a preliminary hearing and/or investigation is deemed necessary. Should the court appoint counsel, her fee corresponds to 80% of the fee of a chosen counsel. Administrative fines are set in the following part of the annex, part 5. They follow the rules for fees for criminal matters.
Now to an area that is especially interesting for non-billable staff. How are they put in the billing picture? Similar to the concept behind the amount for billing by the hour, attorneys will add into their spreadsheet the time they anticipate their support personal to spend on the matter. Named support staff consists mainly of legal secretaries who work the administrative side of the case, as well as research attorneys. While the German legal system does not know law librarians, we do have something similar in the person of research attorneys, who will not be paid the same amount as a fully licensed attorney but bring with them a tremendous amount of knowledge (like a law librarian).

Legal Billing - Differences between Germany and the US (Part 1)

Lately a couple of interesting blog postings (especially Toby Brown's on 3 Geeks and a Law Blog), as well as articles have been published around the issue of billing by the hour or so-called "alternative billing". Having been educated and practiced in Germany, a legal system that lives and breathes anything but billing by the hour, I have been astonished for the longest time, how law firms can charge clients as much as they do, when said clients might not know what the bill will look like in the end.
The fees set by German lawyers are calculated on the basis of either the law on the remuneration of lawyers, the Rechtsanwaltsverguetungsgesetz (RVG) or on the basis of negotiated fees. The negotiation of fees is always a possibility but it has to be set in writing and the sect. 4 RVG as well as sect. 49 Bundesrechtsanwaltsordnung (BRAO) have to be taken in consideration. German law does not allow the negotiation of a fee that would only be paid in case of success.
How is the RVG organized? The RVG does contain general provisions regarding fees as well as an appendix listing individual acts performed by the attorney and the respective applicable rate. It provides for a number of different types of fees, which are either fixed or within a fixed range.
How is a fee set? If the fee is to be determined within a fee range, the attorney chooses the amount at her own discretion in an equitable manner. She has to take into account the circumstances linked with the case, especially scope and difficulty of the legal work, importance of the matter as well as the income and financial well-being of the client (sect. 14 (1) RVG). Additionally her risk of liability might be taken into consideration.


More information regarding the different types of legal work in the upcoming part 2.

Link of the month - Facts about Germany!

While looking for information about the legal billing in Germany I came across this interesting website and thought it makes an informative link of the month. It is called "Facts about Germany" and offers a variety of information in several languages from Arabic to Ukrainian.