Take a firm of eight fee earners that reviews its hourly rates every April and lifts the rate for a senior solicitor from £250 to £275. The new figures reach the accounts system on the first of the month, every live matter starts recording time at them by that afternoon, and not one client receives a letter saying so.
Nothing announces the problem. Time recorded at the new rate sits in the ledger until a bill goes out, and most clients pay without reading the rate line. The one who does read it reaches for the client care letter sent when the matter opened, finds £250, and asks where £275 came from. On matters opened two years ago and still running, the firm often has nothing to show.
The retainer settles the question. A client care letter that names a rate and says nothing more has fixed that rate for the life of the matter, whatever the firm decided in April. Terms that carry the point say when rates are reviewed, confirm that any revision applies only to work done after the client has been told, and give the client the right to end the retainer if the new figure does not suit. Terms that mention a review in passing, silent on when the change takes effect, leave you arguing from nothing.
Notice has to arrive before the work, not before the bill. A letter in April telling the client that rates rise on the first of May supports the higher figure for May's work. The same letter sent in October does nothing for the six months of time already recorded behind it. The SRA Standards and Regulations expect you to give clients the best information you can about likely overall cost and to keep them informed as the matter runs, and a change in your hourly rate is information of that kind.
What the file needs is modest. A dated copy of the notice letter, setting out the old rate, the new one and the date the change takes effect, will usually be enough. Where a long running matter has seen the rate move twice, keep both letters, because the bill has to be split into periods, each justified by the figure in force at the time. Firms come unstuck where a client objected, a partner agreed by email to hold the old rate, and the time recording carried on at the higher one regardless.
When the bill has to justify itself
On a solicitor and own client assessment the court asks what the client agreed to pay and whether the costs claimed fall inside that agreement. A rate above the agreed figure does not become recoverable because the firm charged it in good faith, or because it matches what comparable firms charge. It is recoverable where the retainer allowed the review and the client was told in time. Where the file cannot show both, the bill falls back to the rate the client did agree and the firm absorbs the difference across every affected hour. On a matter running three years with several hundred hours recorded, a gap of £25 an hour is worth finding before your client finds it.
Reading the ledger against the letter
The test is simple to describe and tedious to run. For every live matter, take the hourly rate at which time is being recorded today and set it beside the rate written into that matter's client care letter. Where the two agree, the matter is sound. Where they differ and no notice letter sits on the file, you have a choice between writing to the client now and billing the affected period at the old rate.
Few firms run the check, because by hand it means opening every live file, finding the engagement letter and reading the figure against the accounts system. Four hundred open matters turn that into weeks of unbillable time, so it waits until something forces it.
This is the work the Bracton AI Assistant absorbs. It reads across the whole caseload rather than the one file a fee earner has open, connecting to the case management system your firm already runs, LEAP, Clio, Proclaim or another, through the interface that system provides and under permissions your firm sets. It reads every live matter overnight, so by morning each fee earner has the files that need attention with the next action drafted, which here means the matters where the ledger rate and the letter rate differ, the notice letter ready to go. The assistant writes nothing back without a person approving it, and every output reaches a qualified fee earner for sign off. Inside Bracton the ledger and the engagement letter sit in one record.
Take this year's rate review and test it against a dozen live files this afternoon. If what you find gives you pause, see the same comparison run across every matter your firm holds and book a client account review.