[Music] problem in this is that I see a lot of I a lot of challenges when it comes to my name is Ahmed Elnaggar and this is Monday legal good morning back again to one of the episodes of Monday legal with my favorite Italian lawyer Clotilde Iaia-Polak thank you very much for coming back thank you very much for having me Amed I'm always happy to come and see you how was your week was very good was very busy and I think the this time of the year is the weather is getting nicer and nicer everybody's here in Dubai and uh that's why we're very busy so thank you for coming today I want to ask you a very important question because we get this question all the time as lawyers why do we need to charge per hour for many of our work yes the reason why we charge per hour is because of course time is a limited resource and so because we have limited amount of time in in our lifetime because we all going to go through towards the same results which is you know at some point no longer being here that's the only way we can calculate or we can value what we do and how much time it takes to you know each one of us to be able to respond to a legal question or provide a legal opinion um I think it's just a kind of a u a unit through which we measure or we value um the time that we spend on someone else's problem or solving someone else's problems yes on in my perspective it is very similar to what you said and I believe uh we have no other commodity to sell we don't have I don't know smartphones to sell or cars that we uh put a margin on the cost of of production to to to uh to what we want to make as profit we just have time and based on the time that we spend studying and the experience we accumulate throughout the years uh we we make an assessment to how much I would like to make as an income and I cut it down into days and into hours or how many hours I would like to work and and of course it it grows by time and it grows by experience that's why you see uh Junior lawyer hourly rate is much lower than a senior lawyer's hourly rate and that's how we make our money and assess the value of our work just going back to the value um right of the hour right correctly you mentioned that a junior lawyer hourly rate fees won't be the same as the senior lawyer hourly rate so maybe many people don't know that that is because of course we as individual invest a lot in terms of money and time to prepare ourself to um train ourself to achieve or or um obtain certain certifications that allow us to work um and all of these Investments That lawyers make into being prepared for their job are investments that you do because of course you want to get a return right so and of course as you said this is what we sell we sell a service we don't sell a product or Goods this is our business our business is selling services although of course I'm also of the idea that there are certain Services where I can foresee how much time my team will need to provide that certain service and I can commod commoditize that service and sell it for a fixed amount of time for a fixed sorry amount of fees do you do that for some of your services yes we we do when when when a when a certain service is um is recurring that we do like a company renewal or drafting of an employment contract for a specific jurisdiction or maybe a drafting a will of a client of a certain structure of a family we can assess how much time that it takes it can be 10 hours it can be 12 hours and sometimes eight so the the the range is very very close so we can fix a price for that we can based on the amount of hours and the seniority of the lawyer who is providing the service and in this case we can put a fixed fee and still in our agreements with our clients we limit this service I we say we're going to do this kind of service as long as it does not exceed 12 hours or it does not exceed 14 bable hours so that we know how much it takes because some client want an explanation a full explanation of the law in order for them to make a decision and it takes tons of hours yeah it's always we always I agree and we always also include even when we do let's say a lumpsum fee we always explain and you and and add a disclaimer that that is the case provided that either like we try to limit our liability of course and so we say we will keep that rate provided these conditions are met that you provide us the documents timely that you are not delaying uh providing us documents that you're not delaying providing us the information we need because obvious obviously uh one process can take can be done very fast if the client is very diligent and provides the support that the lawyers or the law firm needs have finalized that matter however my ability to um timely deliver and also therefore economically deliver it also depends on the client ability of being smart in the way they use us and so it's it's a it's a it's a training process I think some clients need it to be educated I find um for instance with uh my fellow Nationals for to that or some of them it is really difficult to understand so to my fellow Italian Nationals um it is very difficult for them to understand why we need to charge by the hour and uh or why we need to charge everything all the fees or why we ask for a retainer ah yes a retainer is one of the main topics plus the I think when when we ever ask for an advanced payment especially that we don't know the client we don't have a retainer with them and we come in for an ad hoc service or or a one-time service they they they are surprised of like why are you why do you want to charge me now while you did not provide the service first and for me it's like why do I have to provide you the service if you don't pay of course so yeah when I was using the word retainer I was using it interchangeably with the fact that we used to say I need a retainer not not in the sense that we have an agreement like for us extended period of time but a retainer because before I provide the service I will ask in advance that money that I will need to ensure that I can deliver the the the the pro possibly I mean I we usually provide a quotation right right and then that quotation can be I don't know 30,000 dams for instance for a certain service then we would ask in advance the full 30,000 Dam and then we would also say the moment this amount is no longer sufficient because for instance you ask for additional Services we will ask you to put us in funds again for the amount that we will then forcee that those Services still will need to that uh the services will still need in terms of time for our lawyers to finalize the um the matter but it's very difficult sometimes for some clients to understand but also on the other end it creates a little bit of a natural selection what do you mean by natural selection that you know if a client is not willing to pay you in advance chances are that he was going to ever going to pay you right that's also true that shows how serious they are exactly so if you really want to work with me um then I would expect as a client that you would respect me and would understand that my time is precious and so you might pay for that time and if I ask you that that time for me to be sure that you're going to pay me and that our relationship is going to work properly then you must pay me in advance because I know that if if I don't spend if you don't spend all that money I know as a lawyer I have an obligation to return that money and I will return that money that you haven't spent but a lot of times it h it has happened to me even with clients that had been my clients for 15 years that they didn't pay their last bill suppose I'm not a lawyer I'm not your colleague all right all right and I'm coming to you for um for a case and I'm telling you someone owe me some money 100,000 dram I need your help to recover this money and can you please accept to take a percentage out of the collection because I don't want to invest in the chance to get this money back and I want you to work on success on success fee oh yeah because I I I don't know if this money is going to come back or not and I don't want to carry the risk to spend this money on legal fees you told me you have a big chance you should trust your judg I should trust my judgment uh we do have cases of course like employment cases and uh um or uh insolvency cases where I actually like to work on the reason however uh for me the success fee doesn't work is that this is simply not my business model although I do understand that there are other countries where you can have these as a business mod and can work however we're not speaking about uh that collection of 100,000 dams I think those countries where you uh you know the lawyer takes the risk and runs with the with the case uh and tries to make out the tries to collect the debt whatever debt that might be are countries where there is a legislation again to protect the lawyer to be able to obtain the success fee once the um award has been adjud adjudicated to the to the client in the UAE I I think there is not much sense in doing that for a number of Reason one again limited amount of time that a solicitor or a lawyer can dedicate to their clients and we have an excess of work I kept saying the other day I went to an evening where the all Italian lawyers were invited and there were a lot of Italian lawyers when I first mve here I was alone uh the only the S there were two sorry only two Italian lawyers in the all of UAE so when I went the other day there were a lot of Italian lawyers and everybody told me oh but are you guys all lawyers in the US said no absolutely not but of course because we're member like we're regarding member of the members of the community they usually invite us to function or where you know new conselor or diplomats are being introduced um just because then they would might need our connection or our expertise in some areas and we can provide that and especially if we've been here a long time and also if it is true that there are more Italian lawyer it is also true that this exponentially there is a much larger Italian population compared to the population of Italians that was here 20 years ago when I moved here so I am actually very busy lawyer and I'm 100% sure that most of my colleagues are busy so there is no shortage of work and so because of that why would I work for a success fee why would I take that risk I'm already as a lawyer assuming the risk of and the same risk of an entrepreneur because I have to pay my employees every month either I get money from clients or not I need to take the risk of uh the compliance and the Govern governance and everything else that that intakes in terms of cost of maintaining good compliance maintaining good anti-money laundry regulation training my employees against all the threats that come from money laundry cyber security attacks and so forth and so on as well as maintaining confidentiality complying with the gdpr and all other compliance regulations so when you are coming to a lawyer like me or like you the client doesn't realize that it's not just they're not just sorry paying our for our time they're also paying for a full infrastructure the infrastructure that you need to make sure that the advice you're giving is safe that the the kind of assistance you're giving is also the right assistance that is required in that moment for that specific clients it also Grant the client and some of our clients really need us in the long term it grants our clients that we're going to still be there the next day and the next month and the next year here and so for me I personally don't work for S I'm I'm not interested to work for a success fee independently from the fact that I might believe in the case or not and when clients tells me oh why if you believe in the case then you don't invest yourself the answer is also very very easy it's like this is not my credit this is not my money and I don't need to work for you for a success fee and I would not tell you to go ahead with the case if I don't think that I can actually win the case I prefer not to take it cuz I like to win so why would I drag you into a case that I think is not going to be a winning case if I truly if I don't truly believe that that case can be a winning case I wouldn't do it but again some clients even if you tell them look the margin of success of this case they are really really really minimal so we don't believe that you should go into litigation they still want to go into and litigate and so um me personally if you ask me would I ever take uh cases on success basis I would never do that honestly because a very simple fact the work of the lawyer especially in conflicts and litigation is a continuous work with the client so if if invested in it you mean cannot be objective cannot be one person invested in it I'm a professional I do my work based on my uh knowledge and my experience if the client himself is not motivated enough to support me with the documents with the information with the technicalities with his memory and putting his heart into the case with me I will not have enough tools and enough information to win this case for him so if he's not financially invested into claiming his own money I would never take this risk and I'm when when I'm risking my time is not only me it's me my accountant my associates my partners uh all the structure my family I'm I'm I'm risking all this there is no point for me to take this risk when I have only half of the control or actually less than half because other factors like the judge the court system the prosecution the execution there's so many other factors So Many Factors there's no point for me to take any success paces and if I treat some files different than others because this one I have success Fe with it and the other one I have a retain a retainer makes no sense for me yeah I would say honestly I wouldn't do it because I didn't feel like I can invest uh that much time in a case where I know that I'm not to or when I have a risk such a high risk I will put more time more of my time in something where I know that I get paid because my client is paying me yeah but yeah so something a bit different though to that is those times where I do decide to do a pro bono yeah of course but that's what I always tell clients that are like sometimes you know have like a big Corporation trying to tell me oh just do this one for free and I always say sorry but I'm not a charity and why would you like a massive Corporation wanted to get something for free from a like a tiny Boutique Law Firm like mine do you guys really need to go around and ask solicitor or lawyers to provide you with a free bit or a free consultation or it's just a question it's never just a question it's never just a question it's never just a and even if it is just a question the fact that I can answer that question in 30 minutes instead of three days that's why you're paying the big buck exactly because I can answer to you in half an hour this also makes a little bit of of U of A confusion for many people because some of the clients would come and say I want to tell you my story and they spend one or two hours in that story and then they realize that they are charged for the time they have been speaking but from my perspect perspective it is time for me whether you talking I'm talking or I'm on the beach it's just one hour or yeah it is the same for me as going out for you with you uh um to to to listen to your story or going out with you to to do the work for you it's the same absolutely it's the same other thing I don't know so if you have that transport now a day in Dubai it takes an hour to go anywhere and then maybe another hour to go back and then some clients they want you to meet them at their place because they don't want to waste time in the car of course so I said I just want you to know by the way that transport so me coming to your off office instead of you coming to mine chargeable it's chargeable because I am still unable to do work in that hour that I need to drive to you and then back to my office so instead of costing you an hour of my time then you're going to pay 3 hours of my time and some people are like ah I didn't know you were charging for transport it's how do you think I can do it make a living if you know I would be like in the car all the time uh going from one client to the other and they would get like yeah of course amazing service but I wouldn't be able to bring a living to to my family so it's a like I know it's painful because whenever we have to pay for something um and sometimes you feel like right I think for people it's psychological as well right if you buy this cup you bought this cup and then once you paid for it you have the cup and you can hold the cup and the cup is you know something that you can touch yeah when you pay for advice on the other end you pay for the advice but you can't touch it and so some people have that I think you find they find it psychologically difficult to understand why they have to pay for your time and your advice even if you're just listening or responding you know a lot of people would assume that lawyers would never have a problem to collect their invoices uh it's not the reality and and my is very very hard sometimes to collect our fees it is it may be hard as I was saying we usually would and I think in that many lawyers do the same especially in the UAE although I'm often asked if this is practice and I always to ask the full amount in advance and explain this is practice because unfortunately for us collection is an issue and that very often if we do any work without receiving the compensation or our fees prior to us providing the service clients end up not paying because they say but what have you done for me uh even though maybe you spent many hours to respond to questions and meeting them and sometimes going out of your way to you know try to solve their issues so this is something that uh it is hard to um to deal with um in terms of how do you collect because you know sometimes as I was trying to say earlier when you have obtained a retainer then maybe your uh service exceed the retainer by the time you realize that you've exceeded the retainer maybe you've already built 10,000 dams more compared to the retainer so you go back to the client and you say uh please note that we build 10,000 dams more compared to the retainer so 10,000 dam is not a huge amount above a retainer let's say of 30 35,000 Dam right because it's kind of average what you might end up building a little bit more than what you expect um and always they come back and say oh sorry but you know I'm not going to pay that because it was you know you quoted us this way and then you have to go back and say yes but this happen because this this and that and by the way please refer to our terms of Engagement where we explain how this work so please put us in funds before we proceed with any further work and so if you have any further work to proceed with chances are they're going to pay you and then you can you don't need to collect and then you would ask a bit more so that you can cover further services but sometimes it happens that that retainer you just went over like 5,000 6,000 Dam uh and then the client has received the services and decides not to pay and then you know especially if you deal not just with companies but also with individuals those 6,000 5,000 Dam if you multiply for 10 to 15 clients suddenly is a considerable amount of so for me collection is difficult uh when it's an amount of money that makes no sense to go to court because it's so much it's not just the amount of I mean of going with the client or going it's just even the time of yourself having to spend in recovering 5,000 Dam so it takes me less to find another client and build 5,000 D to the client and wasting my time to go to the cour it's going to take me 10 hours my time and 10 hours of my time is 30,000 Dam that I can build to somebody else so that's the difficulty for me to collect those small amount of money so we're trying to always avoid that to happen and still sometimes that happens that you are left with a small amount of money that has not been paid and then of course there is another painful subject that is when you when you work with large corporation then you have a retainer and you build monthly and then sometimes large corporation too can have liquidity issue and when they have liquidity issue the first thing they cut is their supplier and the first thing that happens is usually between those suppliers what they cut is the payment of their lawyers I don't think it's a very smart move because in the moment where you are having a liquid liquidity issue the one consultant that you need to keep close to your heart is your lawyer is your lawyer because the moment then you ask me to help you somewhere where you can recover liquidity I'm going to say I'm sorry but sorry no I'm not working until when you guys pay me everything that is due to me and then I'm going to start applying interest rate and then in those cases of course it makes sense perhaps to also make a claim and try to recover those amounts on the other end what is the downside of suing your own client is that that client then is lost and so is not it is not always worth it sometimes also you can I can understand clients may have a liquidity issue momentarily um so in that cases I try to have some flexibility for a certain period of time but then at some point I also say look I need to stop building you because otherwise I'm only uh making your situation as adaptor to the firm worst and this is also not fair to you and it's not fair to us because we can build that time to somebody else so it's a difficult topic what do you do when somebody doesn't pay you Amed how do you deal with the problem as you said I mean there is a there's always an element of partnership between us and our clients and in some cases we have a client of a of a one-time service we really ask for uh most most of the most of the time we ask for our fees in advance because we still don't know the client very well and so on but when I have a 10 years old client this I can I understand where they coming from I understand the background I know if they're going to pay or not maybe they are late maybe they have a liquidity issue right now in the end is normal if they don't pay immediately yes the sensitivity comes when the client a little bit is acting in a non um non-logical way that they think that I'm their partner and in reality I'm not their partner I'm I'm I'm the business partner and the Business Partnership is that we serve each other and we help each other you bring me your legal business I do it you bring me your contracts I draft it or I review it I Safeguard your interest but at the same time you pay my bills on time yeah and this is kind of partnership we're working on but I'm not part of your investment to tell me oh this investment didn't go through so I'm not paying you I'm not paying like I'm not your partner I'm not making economic decisions for you yeah I'm helping you achieve your investment goals by safeguarding your legal interests but I didn't invest with you don't hold me and you're not going to get the rewards that he's going to get so it's not like you you're not participating to that risk because you're already as a lawyer have your own risks your Prof the profession our profession has already a lot of risks attached to it so we can take also the risks of somebody else of our own clients it it happens a lot as well when we receive claims for very small amounts so a collection a debt collection case for example and the amount is I don't know 20,000 diram yeah the legal work and the efforts that you have to make is probably very very similar to another case of 20 million dham exactly the procedures the drafting the arguments the reward is higher the reward is much higher for the client and for me exact so when the client come and they say yeah but why are you charging me that much because the whole debt is 25 that's an economic decision that you have it's not uh it's not going to make my level or my quality of work or the time I spend any lower or higher or higher based on that and and then it comes as well to the assessment of the fees because the client would say okay why are you charging so high when the debt is so high then it comes that there must be always a balance between the fee and the claimable amount in general well sometimes times you know I explain because if the claimed amount is higher then you're also your risk is higher so you want to make sure that your um pay in the sense that your risk in in terms of liability right if you let's say commit something that is a you know you're you're not being diligent or you miss a ter so you miss to submit some documents to the court right your liability towards your client for missing that deadline would be much higher than a case of 20,000 Dam so clearly there is an element right when we establish or estimate the the amount the amount of time we're going to spend into a claim of when we're going to try to recover 25,000 Dam and where we're trying to recover 20 million Dam the amount of time and effort and expertise that you might want to invest as a lawyer into a 20 5K case compared to a 20 million case it is different of course because your liability in respect to the two claims your professional liability in respect to the two claims is different what are the elements that Define the hourly rate for a lawyer is fair or not right so how can we determine if a lawyer fees are fair first of all somebody should look at uh the years of qualified experience what qualified experience is is the year since that person qualified therefore passed an exam to exercise as a lawyer in their country of origin or in the their country of qualification and so depending on the the years that that person worked after the qualification that is a good um a good unit of uh to to measure if that person is sufficiently qualified to ask for that specific um hourly rate another another way you can assess if the hourly rate is fair or not is you can compare it to the standard hourly rates uh as that are established by the DFC courts uh through directives on a year-to-year basis and check so my my lawyer is post qualific three years post qualifi post qualification has three years of post-qualification experience does that how does that fair or compare with a lawyer that is been qualified for that amount of of time and is uh registered with the to to to work with the DFC court for instance if a lawyer for example is not established in the DFC perhaps is established outside of the of the DFC or has a law firm in another Emirate you might want to consider that that lawyer fees will be slightly lower but don't think that they're going to be tremendously low because in any case both companies or law firms based anywhere in the UAE have high standards of compliance with UAE federal law on anti-money anti-money laundering um anti- financing of terrorists ande e governance code of ethics and so forth and so on and so all lawyers need to abide to those the C of Ethics the compliance as well as any requirements that is coming from their um bar of or Association or um Law Society that they belong to or their register with in the country of origin or the country of qualification so these are all elements that I would look at I would also look at if that because sometimes you know we have to choose lawyers for our clients so sometimes my client clients or companies ask me to get a lawyer in another jurisdiction and they ask me can you select a lawyer for us and so I also interview the lawyers I like to have a sense even half an hour chat to make sure that I have a good sense that I that of the way of that person um that pencil Works how it reacts what type of um um you know there needs to be some chemistry for me and so try to see if you have a good chemistry with that lawyer it's really not worth it to pay any amount to have to work with somebody that you really can't stand or you have no chemistry with because you will never even if he's the best lawyer for that case you will never enjoy it and therefore you won't work well and you won't achieve the same results maybe go for maybe a lawyer that is slightly less experienced but that will give you 100% because you get on well with them these are my points do you have any other points I agree with you very much and I think the mo like what what you said they all all relevant points the market uh average rate the years of experience the practice area as well Define a little bit the the the hourly rate um I agree with all of them but I also agree very much that the price should not be the reason to decide whether you work with that lawyer or not you have to have a a chat or have a pre-consultation like one hour consultation to understand how this lawyer talk how they walk if they giving you the the right advice are they pushing you towards litigation for no reason are they actually trying to figure out the whole uh story instead of just uh taking your side for no reason very quickly and tell you oh we're going to do this and that and uh and uh and Promise Too Much yeah then you know the these are the things that you need to understand and uh um as you said working with the lawyer being able to communicate be able to listen to is very important because some lawyers don't even give you the chance to talk or or give you enough room to explain yourself and it's very important because a continuous dialogue between the lawyer and client is really partnership until this project is finished or until the the the the relationship is terminated that's what I was say there needs to be chemistry you need to be able to to understand your lawyer and your law and you have to feel that your lawyer is listening to your voice is listening to what you want to achieve and is really trying to understand how that how can he or she achieve your goals achieves your goals so yeah um so as a 20 years uh qualified lawyer my recommendation to lawyers in regards to fees is to don't unell yourself don't accept to do work for free and I don't say that simply because it is fair that you get the right amount and you get paid for your work but also because don't forget that you represent a profession and as a representative of of the profession your behavior and the quality of your work and the way you you present yourself does not reflect just on you but it reflects on everyone on on everyone that is part of the profession of a lawyer and on the other end i' also want to another recommendation is always to uh under promise and overd deliver that is your goal so if a client comes to you don't give them a super positive um outcome um potential gives give them the reality of what it is and be kind of realistic on expectation because if you then bring the bring the results uh to that client that client is going to really appreciate that a lot more than if you had over promised and then under deliver which is the worst you can do for yourself so yeah in a nutshell get paid and do a good job yes and and one one last advice from my side about the fees and advice to my colleagues lawyers fresh ones and uh experience one as well fees are not everything you know I understand very well that this is one of the most important important elements to keep us moving and keep us working but you have to understand that if you charge your client so high or if you charge your client for something that you know that they do not benefit from the relationship will be uh uh broken the trust will be broken so when you charge your client charge for the things that you believe is a benefit for them if there's no need to file that case please don't take them to court if there's no need to do a transaction with a corporate m&a or whatever tell the clients it is not a a a good uh decision because the long-term relationship with your clients is much more important and much more valuable than any easy quick Big Win thank you very much and this is your dose from manday legal thank you very much clil for coming back to us thank you Amed for having me is always a pleasure thank you and see you next week