Chances are that, if your only experience with lawyers is watching Law and Order or Ally McBeal, the cost of legal fees may come as a shock. Most people do not give much thought to the cost of hiring a lawyer, until they need one.
It is good to remember that hiring a lawyer is not unlike paying for other goods and services – you should do your research and ask a lot of questions before you sign a contract or pay for a retainer. This article will help to explain some of the basics about legal fees.
What the heck is a retainer?
A Retainer is a fee paid in advance to someone, usually a lawyer, to secure or keep their legal services when required.
Do lawyers always require a retainer?
Lawyers do not always ask for a retainer before they start work on your legal case. However, the payment terms for legal fees should form part of your contract with them. You can sometimes negotiate a payment schedule, credit card authorization, or even a flat fee for service.
If you did not spend the entire retainer on your case, the remainder is returned. If the retainer was not enough to complete the case, you may be asked for additional funds.
In some legal actions, such as ICBC or other personal injury cases, your lawyer may not require you to pay a retainer. Instead, they may take your case on contingency.
What is a “contingency”?
Taking a case “on contingency” means that the lawyer will receive a portion of your settlement (money you receive upon successful conclusion of your case), rather than charge you legal fees up front.
Payment on contingency is usually only arranged for motor vehicle claims and personal injury types of legal cases, and not family or criminal law.
What is a flat fee?
A flat fee is a straight fee for service, rather than a bill based on hours worked. This can be arranged for simple wills, real-estate transactions, mediations or arbitrations, or uncontested divorces. The amount of the flat fee charge is negotiated between the client and lawyer, based on the lawyer’s judgement of how much work is expected on the file.
How much do lawyers charge per hour?
A lawyer’s hourly rate can vary depending on the city you live in, the area of law, and the lawyer’s experience. The government also requires that taxes are paid on top of legal fees.
What if I don’t use a whole hour of the lawyer’s time, do I still have to pay for it?
Lawyers bill for the proportion of time spent on a file. If you meet with a lawyer for half an hour, they would bill you for that half-hour. However, they will also bill for actions required as a result of that half-hour. For example, if further action is required as a result of information received in that meeting, the lawyer may need to draft a letter or court document, or communicate with the Court, or Opposing Party. This time would also be added to your bill.
What is a “disbursement”?
A disbursement is an expense that the firm incurs on your behalf, and are added to your invoice. Typical disbursements may include: court filing fees, courier fees, service of documents fees, and travel costs. Disbursements may also include payment to other professionals working on your case, such as Accountants, Mediators, and Psychologists.
How do I know how much my case will cost?
Your lawyer will do the best job they can at estimating the cost of your case. The lawyer will base this on their experience of similar matters, and details of your particular case. However, there can be factors outside of their control. For example:
-if the other side of a court case makes additional applications, or procedural arguments
-if court appearances are delayed, postponed, or longer than expected
-when there are copious amounts of financial material, reports, or transcripts to review or produce
-when the lawyer on the other side is not interested in negotiating a settlement, or has a “high conflict” style of litigation
-when the parties change their minds about agreements, or require complicated changes to agreements or orders.
Hiring a lawyer is not only hiring a service, it is also investing in a professional relationship. The best way to understand your legal fees is to ask questions, know your contract, and to keep the lines of communication open.
Jayne holds a Masters in Psychology and is a highly experienced Divorce Coach and Child Specialist. She is currently the Office Manager of Butterfield Law.