Law Office Takes on Partner Role in Studying Legal Service Costs in St. Petersburg and Leningrad Region
Rumyantsev Legal Law Office has taken the role of a regional partner in a large-scale research of the cost of court representation services, organized by the Federal Chamber of Lawyers of the Russian Federation and held by the VETA expert group.
The research has been conducted since 2015 and helps practicing lawyers substantiate the cost of legal services in courts. St. Petersburg and the Leningrad Region have been reviewed for the first time.
According to the survey, the cost of legal services in St. Petersburg and the Leningrad Region increased during 2018. 34% of respondents believe it to be so, 23% are sure that it is same as in 2017, 12% have noticed a reduction of the total cost, 31% are undecided. According to 24% of respondents, in 2019, it will increase, 9% believe that it will reduce, 19% expect no changes, others 48% are undecided.
The research showed the average cost of court representation services at first instance to be RUB 308,531. The minimum, according to the survey, is RUB 70,000, the maximum is RUB 700,000. The most “expensive” category is tax disputes (with an average cost of RUB 468,750). The lowest average cost (RUB 202,950) is seen in administrative cases.
The experts concluded that the average cost of services in case of appeals was up to 70% of the initial proceedings’ cost; in case of cassation, 51%. In the first case it was RUB 210,347 (min. 45,000, max. 500,000); in case of cassation, RUB 156,007 (ranging 40,000 to 400,000). Here, tax disputes are also leading in price, with an average cost of RUB 248,500 and RUB 221,250, respectively. Outsiders in cases of appeal are administrative disputes (RUB 119,500); in case of cassation, cases of debt collection accounting for RUB 114,368.
The success fee, if agreed upon in addition to the principal payment, averages 9% (ranging 1–3% to 20%) of the claim amount depending on the category. If the payment consists only of the success fee, the average percentage will be 10% to 15% in categories with the minimum of 2–10% and the maximum of 10–25%.
In 2018, 35% of respondents noted the trend of transferring the functions businesses previously outsourced to external lawyers to such businesses’ full-time lawyers “as a part of the bundle,” 9% failed to notice this trend, others were undecided.
The research has revealed that in St. Petersburg and the Leningrad Region, unlike most of the studied regional markets, hourly payment for services is common, like in Moscow. According to the survey, it ranges RUB 3,500 to RUB 16,400 per hour, depending on the lawyer’s position.
It is worth noticing that the research is of an applied nature, and its deliverables can be used to determine the market value of court representation costs. To this effect, the authors of the research have developed a special formula that considers the case-specific features and the labor costs associated with hiring a legal advisor or lawyer.
Osip Rumyantsev, a Managing Partner with Rumyantsev Legal:
— We took on a partner role in the research covering St. Petersburg and the Leningrad Region, as we consider it important and relevant for the local professional community. Today, the payment standard is set only for court-appointed lawyers, and it cannot be used to assess the work of a private legal advisor or lawyer, as it fails to consider the market environment. The deliverables of a similar research conducted by the VETA expert group are abundantly used by both lawyers and courts to assess the cost of legal services in Moscow, Nizhny Novgorod, Tyumen, and other cities where they held their survey. In 2019, it is expected that the research will become even more ambitious and it will help to adequately assess the situation in the market.