Kenya’s lawyers have raised their fees by nearly 50 per cent, in spite of concerns over price-fixing raised by the Competition Authority.

Chief Justice Willy Mutunga has gazetted the Review of the Advocates Remuneration (Amendment) Order (ARO), 2014, which increased the fees charged by lawyers, effective mid last month.

This means new matters being taken up after the gazettement will attract the new charges — especially in services such as conveyance, filing of suits, registration of trademarks and debt collection.

However, clients have been handed a reprieve after the Law Society of Kenya settled for a general increase in fees in the range of 40 per cent, down from the initial proposal of 80 per cent to 100 per cent. The rates were gazetted on April 11.

Before the changes, an individual buying a Ksh5 million ($58,823) property would pay the lawyer 1.5 per cent, amounting to Ksh75,000 ($882). The advocate, however, had to observe a set ceiling of Ksh25,000 ($294).

Under the new rates, the advocate will now charge two per cent of the value, in this case Ksh100,000 ($1,176), reflecting a 33 per cent increase in the fees.

However, under the new regulations, the fees payable to the vendor’s advocate will be reduced by a third, where the advocate does not prepare the letter of agreement, heads of agreement or the agreement for sale.

For mortgages and charges, legal fees have gone up by at least 50 per cent.

The order has also set new fees for preparation of leases, agreements for leases and tenancy agreements, which have gone up by at least 35 per cent.

Filing a new civil suit valued at between Ksh200,000 ($2,353) and Ksh500,000 ($5,882) will cost a client Ksh45,000, up from the current Ksh28,000 ($329) — a 60 per cent jump.

The LSK said the increase reflected the current economic realities, as lawyers’ remuneration was last reviewed four years ago.

The new rates will see Kenyan lawyers open a wider salary gap ahead of their East African Community (EAC) counterparts, with Uganda, Rwanda and Tanzania also mulling reviewing the fees in the coming months.

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Labour experts said disparities in legal fees would further complicate movement of professionals across the region.

Kenyan lawyers seeking deals outside the country would be forced to take fee cuts as the region’s market finds its supply and pay structure balance under the Common Market Protocol signed in 2010.

Law is a major beneficiary in the battle for the control of the country’s increasingly lucrative corporate deal-making.

Growing investments in infrastructure, oil and gas and financial services, as well as a rising number of foreign investors eyeing the mergers and acquisitions market, have created fresh opportunities in project finance, venture capitalism, business formation and due diligence investigation.

Pushing through these projects demands a wide range of professional support, including legal services.

Top Kenyan firms have been increasing their footprint in the country and across the region to include Tanzania, Uganda, Rwanda and Burundi as they seek to cut reliance on the home market.

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In Rwanda, plans are underway by the Rwanda Bar Association to set the minimum and maximum legal fees that lawyers can charge in a transaction. However, its not clear when these rules will be effected.

In Uganda, plans are underway to have lawyers who have practiced for a longer time charge their clients more under a new fees structure being worked on by the Uganda Law Society (ULS).

Currently, all lawyers pay Ush400,000 ($156) for their annual practising certificate but the ULS secretariat wants this amount varied starting next year. The variance in the fees is to be based on seniority.

The practising licence will cost a lawyer who has been in the field for less than three years Ush400,000 ($156) while one who has practised for ten years and above will pay Ush1 million ($390). The Advocates remuneration and taxation costs rules will also be amended to increase legal fees.

In Tanzania, the Tangayika Law Society is currently overhauling the legal system to provide for equitable remuneration for advocates. For example, currently, the government pays an advocate a flat rate of Tsh100,000 ($65) to represent a capital offence client.

“We don’t look at those rules when charging our clients,” said a senior advocate in Dar es Salaam Charles Mashauri. “The rules guide us on the procedure to file the bill of costs against clients, but not how much to charge, that’s why the law society wants the review,” he added.

The increase in fees for Kenyan lawyers ends months of haggling between the LSK and the Competition Authority, which had opposed the review on the grounds that the proposed ceiling set by the LSK would restrain competition within the profession because law firms capable of providing services at a cheaper rate would be constrained from expanding business by providing cheaper services.

The new regulations prohibit advocates from getting into agreements with clients which allow the former to charge fees at a scale lower than the prescribed fees.

Advocates now only have an option to charge as per the scale fees in the new rules, charge an hourly rate or enter into agreements with their clients so long as the fees negotiated are not less than Ksh10,000 ($117).

According to the Advocate’s Act, any advocate who accepts less than the scale fees is liable to a fine of not less than Ksh100,000 ($1176) or imprisonment of up to two years.

The ceilings are seen as a way of cushioning the profession from a vicious pricing war that could come in if firms were to decide on their own what to charge.

The CAK had asked the LSK to apply for an exemption for the ARO, 2014 not to be treated as a restrictive trade practice. However, the LSK has no such intentions.

“We are not seeking any exemption … you only seek exemption when you are subject to it (CAK),” said Eric Mutua, the LSK chairman on Friday.

The LSK had presented various drafts on the proposed rates between 2011 and 2013 before the Chief Justice who subsequently appointed a committee to review the proposed amendments.

The new regulations had attracted the attention of the Commission for the Implementation of the Constitution (CIC), the Competition Authority, the Architectural Association of Kenya (AAK), the Kenya Bankers Association (KBA) and the Association of Professional Societies in East Africa (APSEA) among other stakeholders in subjecting the amendments to scrutiny.

The Chief Justice had in late 2012 asked LSK to subject the legal fees structure to public scrutiny, a suggestion the professional body was opposed to.

Additional reporting by Emmanuel Muga and Dicta Asiimwe