Baroness Shackleton, Britain’s highest-profile divorce lawyer, has increased the bills of celebrity clients beyond the time she recorded having spent on their cases, The Daily Telegraph can disclose.
Madonna and Sir Paul McCartney appear to have been charged hundreds of thousands of pounds more than the hourly rate would have demanded, documents show, a practice known as “marking up”.
The Conservative peer, who represented the Prince of Wales and the Duke of York in their divorces and remains solicitor to Princes William and Harry, appears to have charged her clients more than twice as much as the rate for the actual number of hours she had recorded as having spent on their cases, according to internal time sheets.
The sheets, seen by The Daily Telegraph appear to show that a six-figure sum was added to bills of both Madonna and Sir Paul, as well as at least seven other clients in a column headed ”mark up’’.
In one case a £14,000 bill for work on the former Beatle’s divorce from Heather Mills shows a “mark up” to £150,000. Both Madonna and Sir Paul have confirmed that they were happy with Lady Shackleton’s representation and satisfied with the billing.
The disclosure will give rise to concerns about the transparency of solicitors’ billing practices.
Lady Shackleton’s law firm, Payne Hicks Beach, came under investigation in 2009, but the Solicitors Regulatory Authority closed the case less than a year later without ordering any sanctions.
The authority interviewed her about her practice of marking up bills and asked her to explain if there was any “scientific” basis for calculating the sums she added.
It was estimated that she had “marked up bills by £659,000 over a period of time”, according to a note of a meeting between Lady Shackleton and the authority.
The solicitor admitted being “slack with time sheets” and said she added lump sums to her clients’ bills to make up for the “huge amount” of unrecorded time she spent on every case.
The authority wrote to the law firm in January last year to confirm that it had closed its investigation and “no further action” would be taken.
This newspaper has seen a cache of documents that disclose the full details of the firm’s billing practices.
Documents from the company’s internal billing system show that, as well as charging a rate of £550 an hour, Lady Shackleton added large sums of money to her clients’ bills under the “mark up” column.
In one example, a bill for work on Madonna’s divorce from Guy Ritchie in December 2008 came to £85,176.84 when charged at the hourly rate.
But a “mark up” of £100,000 had been added, £75,000 of which had been billed as work done by Lady Shackleton, while £25,000 was charged by another partner.
Other documents show that Madonna’s business manager had requested a “breakdown of the hours” and was told “we don’t usually provide a breakdown”.
Lady Shackleton expressed relief when the singer agreed to pay the £221,000 bill, which had been marked up.
In a private email to a colleague she wrote: “This is good news as I was worried that they were cross about the bill,” she wrote, adding: “We obviously shd have asked for more?!!!!! F x.”
Payne Hicks Beach said the email was a joke. “We would have thought it is obvious that the internal email dated 15 December 2008 was intended to be humorous, from its punctuation alone.” Last night a spokesman for the law firm said all the clients had confirmed they were happy with their bills.
“We are satisfied that the bills rendered were fair and reasonable for the work in fact done,” he added.
“It should be obvious from the SRA’s conclusion that often substantially more work can be done than is formally recorded at the time.
”You are quite wrong to treat only the time which is formally recorded as the time and the basis upon which a client can be properly billed. In relation to clients, and in particular high profile ones who are often out of the country and lead particularly busy lives, extensive work on complex issues is done at anti-social hours and under considerable pressure.”
Alan Sampson, the legal ombudsman, has said that he has opened thousands of investigations into allegations of overbilling by solicitors since being appointed legal watchdog in October last year. He warned that the systems used by law firms to bill their clients are in urgent need of reform although did not comment directly on the disclosures about Lady Shackleton.
“People seem to be largely intimidated and in awe of their lawyers and are uncomfortable about challenging them about their legal expenses, which in some cases have increased for no good reason,” Mr Sampson said.
Marc Gander, the founder of the Consumer Action Group, said many consumers were being “kept in the dark” about what they were being charged.
During her interview with the Solicitors Regulatory Authority in May 2009, Lady Shackleton told investigators that she marked up her bills because she was available to her clients “24 hours a day, 52 weeks of the year”.
Minutes of the meeting, seen by this newspaper, show that she admitted being “slack with time sheets” and claimed that she often failed to record “a huge amount of time” on her cases.