Common billing practices
Note that the Law Society does not set lawyers' fees and there are no fixed rates for legal services. The follow are some common billing practices.
Fixed fee for all work regardless of the time involved. This method of billing is often used for specific transactions such as incorporating a business or purchasing a house. Some lawyers also use a fixed fee for specific types of court appearances such as defending a client on a minor criminal charge.
Hourly rate which includes time spent on the phone, in meetings, doing research, preparing documents, dealing with correspondence, appearing in court and anything else involving your file. Hourly rates usually reflect the lawyer's skill and experience - senior lawyers charge more per hour than lawyers who are just starting out in practice.
Contingency fee or a percentage of the money the client wins in a lawsuit. If no money is recovered, the lawyer generally collects no fee. Contingency fee agreements are common in personal injury claims, product liability cases and class actions. (See below for more details about contingency fees.)
Retainer is a sum of money you pay to your lawyer as a deposit for the services the lawyer will perform for you and the expenses the lawyer will incur on your behalf. Your lawyer will submit accounts to you, which will be paid from the retainer.
Disbursements are expenses incurred by your lawyer on your behalf such as government fees, court filing fees, courier charges, photocopying costs or fees paid for expert reports from people such as doctors or engineers. You are responsible for these expenses and they will be included in your legal bill.
Taxes Lawyers are required to charge GST and PST on all fees and most disbursements.
Contingency fees are fees paid to a lawyer acting on behalf of a client in a case, especially a suit for damages. The lawyer's fee becomes payable only if the case is successful. Contingency fees are usually based on a percentage of the damages recovered.
Contingency fee agreements must be in writing. Contingency fees are not permitted in family law cases involving child custody or access. They are permitted in other types of family law cases, but must be approved by the court.
In a claim for personal injury or wrongful death arising out of a motor vehicle accident, the maximum contingency fee allowed is one-third of the amount recovered. In all other cases involving personal injury or wrongful death, the maximum allowed is 40% of the amount recovered.
There are no maximum limits for contingency fees in cases not involving personal injury or wrongful death. Lawyers often vary their contingency fee rates depending on the amount of the claim, the degree of risk involved and the stage at which the case is resolved.
In most contingency fee agreements, the client is required to pay all disbursements such as medical reports, court filing fees and photocopying charges, regardless of the outcome of the case.
Keeping your costs down
Lawyers usually bill by the hour, so it’s important to organize your material before talking with your lawyer. That way you can keep your costs down by keeping communications brief and focused. Getting to know your lawyer's assistants can also help you save money. If a secretary, paralegal, articling student or junior lawyer can help you, contact that person instead of the most senior lawyer.
It’s also important to reflect carefully before making decisions. Making the right decision the first time will be less expensive in the long run than frequently changing your mind.
You should also consider whether your expectations are reasonable. Make sure you and your lawyer agree on your plans and priorities and that they are likely to lead to the outcome you want. Above all be realistic. Don't spend $1,000 to recover a $500 asset.
For lawyers, much like other professional advisors, fees are a market issue. There is no fee schedule for legal services, and the Law Society has no authority to control what lawyers charge other than setting maximums for some contingency fees.
Before starting work on your file, your lawyer may prepare a fee agreement setting out how you will be billed for the services.
If, upon receiving a bill, you have complaints about a lawyer’s fees, several options are available.