A Settlement Agreement is a legally binding contract which prevents you from bringing any claims against your employer. Although there is no obligation for you to sign a Settlement Agreement a compensation payment is usually paid as an incentive for you to do so.
Once you sign a Settlement Agreement you have waived your employment rights therefore it is a legal requirement that you are made aware of any rights you may have before you sign the document. The solicitor will sign a certificate to confirm that they have advised you of any claims you are compromising.
As it is a legal requirement of the Settlement Agreement that you seek legal advice it is normal practice for your employer to make a contribution towards your legal fees. Although the amount of the contribution varies it is usually in the region of £250 - £500 plus VAT with any excess met by you.