A recent decision involving a major US law firm and a $35 million legal fees dispute has brought a familiar issue back into focus: the importance of costs transparency and keeping clients properly informed throughout the life of a matter.

While the case arose from complex arbitration proceedings, the key issue identified by the court was not whether the fees themselves were too high. In fact, the judge accepted that the level of work and the hourly rates charged were broadly consistent with the nature of the case.

The concern was much more fundamental. The client had not been kept properly informed about the total cost and how it was developing over time.

When high costs are not the real issue

The case involved substantial and complex legal services delivered over a relatively short period. The final bill reached approximately $35 million, a figure that immediately attracted scrutiny.

However, the court’s focus was not simply on the amount, but on the lack of price information provided throughout key stages of the retainer.

In particular, issues arose around:

• Increases in hourly rates for carrying out the work without clear communication
• Limited updates on the range of costs as the matter progressed
• A disconnect between the original engagement and the eventual total cost

This highlights that even where costs are justified, they may still be challenged if they are not properly explained.

Why transparency rules matter in practice

In England and Wales, firms must comply with the SRA Transparency Rules, which require certain types of legal services, such as debt recovery (up to 100,000), road traffic offences and licensing applications, to publish clear pricing information on their websites.

However, the broader obligation goes much further. Under the SRA Code of Conduct, firms must provide all clients, including those in complex, high-value matters, with the best possible information about costs, including updates as the matter progresses and where circumstances change.

While those rules are often associated with consumer-facing services, the underlying principle applies equally to complex, high-value work.

Clients should always understand:

• The likely range of costs
• The basis of charging, including any hourly rate
• How costs may change as the case develops
• What work is being carried out on their behalf

Without that clarity, even sophisticated clients can find themselves exposed to unexpected costs.

Keeping clients informed at key stages

A central issue in the case was the failure to provide meaningful updates as the matter progressed.

Costs information should not be limited to the outset of a retainer. It must be revisited at key stages of a case, particularly where:

• The scope of work changes
• Additional work on the case becomes necessary
• The complexity of the litigation increases
• The overall total cost begins to exceed initial expectations

In practice, this means providing ongoing updates about:

• Work being undertaken
• Time being spent
• The financial impact of strategic decisions

Without this, clients are not in a position to make informed decisions about how their case is being run.

The risks of changing hourly rates

One of the more striking aspects of the case was the increase in hourly rates during the retainer without clear notification.

From a UK legal costs perspective, this raises important issues.

Charging structures, whether based on fixed fees, hourly rates, or damages-based arrangements, must be clearly explained and understood. Where rates change, the client should be informed of:

• The new rate
• The reason for the increase
• The impact on the overall cost

Failure to do so can undermine the clarity of the retainer and create grounds for challenge.

Retainers and client understanding

A retainer is not simply a document signed at the start of a matter. It must remain effective and understood throughout.

Clients should have a clear understanding of:

• The scope of the legal services being provided
• How fees are calculated
• What work is included
• How additional work will be charged

Where that understanding is lacking, disputes are far more likely to arise — particularly in high-value matters.

This is often where issues escalate to complaints or referrals to bodies such as the Legal Ombudsman, particularly where clients feel they were not given adequate price information.

Transparency and costs recovery

A key takeaway from this case is the link between transparency and recoverability.

Costs are not simply recoverable because work has been carried out. They must be:

• Properly incurred
• Reasonably charged
• Clearly explained to the client

Where there is a lack of transparency, costs may be vulnerable to challenge, regardless of the complexity of the matter.

This applies not only in disputes between solicitor and client, but also in inter partes costs recovery, where the court will consider whether the work and the cost was justified.

How ARC Costs can assist

At ARC Costs, we regularly advise on issues arising from lack of costs transparency and unclear retainers.

In our experience, disputes often arise not because the work was unnecessary, but because the client was not properly informed about how costs were developing.

We assist firms in ensuring that their costs structures are clear, defensible, and aligned with regulatory expectations. This includes reviewing retainers, advising on pricing models, and ensuring that clients are kept updated at appropriate stages throughout the matter.

We also support clients where costs are being challenged, helping to assess whether the necessary information was provided and whether the costs claimed are sustainable.

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