We understand that there can be confusion about how lawyers charge for their time and the fear some people have about receiving an invoice at the end of your matter that far exceeds the amount you expected to pay. There are various ways law firms charge which differ depending on the area of law they practice in and their firm policies. For example, some firms may charge an hourly rate for the work they complete on a file, while others are able to provide a fixed fee for the matter.
Fixed fee billing
Our firm charges on a fixed fee basis for all matters we handle. What this means is that we will advise you prior to you deciding to formally engage us, what our professional fees and disbursements will be to complete all work required to be undertaken in relation to your matter based on the information we have on hand and your instructions as to how you intend to deal with the matter. We will clearly outline the scope of works as we understand it so that you understand what is included in that fixed fee.
If we are not able to provide an exact fee when you first seek to engage us, we will provide a range of our estimated fees and disbursements for different defined stages of the matter. That situation would ordinarily arise if you have been charged with an offence that cannot be finalised in the Magistrates Court and a Brief of Evidence has not yet been disclosed. It can be difficult to determine the volume of material involved in your matter and how long it will take to finalise the matter at the very early stage when we are first engaged to act. We will advise of our estimate of legal fees and disbursements for the different stages that may be reached in your matter. For example – stage one, being the Magistrates Court committal proceedings, then stage two, being the District Court sentence proceedings. You will then be liable to pay the fees for each stage upon its completion.
Costs Agreements / Client Service Agreements
Lawyers have a professional obligation to keep their clients informed of all the costs that might be incurred with their matter. If the estimated legal costs and disbursements are expected to be more than $1,650.00 (inclusive of GST), your lawyer must provide a costs agreement (also known as a client service agreement). The client service agreement will be a written document that must include the following information:
- How the costs are calculated
- A realistic estimate of the total cost (or if we have split the matter into different stage of the proceedings, a number of estimates). This will include information about the major variables that might affect the estimate
That document will also include information about your rights.
If there is any substantial change to your matter, such as you have been charged with further offences, or you have decided to change how you want to progress with the matter, the original costs agreement / client service agreement may be terminated by the firm and you will be required to enter into a new one for the updated scope of works.
Professional Fees v Disbursements
These terms are regularly used by lawyers when discussing the costs associated with your matter. The professional fees (or legal fees) are the fees the lawyer will charge you for acting on your behalf. It is a service fee for that lawyer’s time spent on your matter.
Disbursements are expenses your lawyer will charge you for out-of-pocket expenses that they have incurred on your behalf. This includes things such as a Barrister’s fees if they are engaged, any court filing fees, a Psychologist or Psychiatrist fees in preparing a report for court if required.
Do I have to pay upfront?
It is common for a lawyer to ask for money in advance to cover your legal costs. The money will be held in the firm’s trust account and it can only be used to cover your legal fees and disbursements on the terms agreed to. We will require your authority to pay any money from the trust account to our general account upon completion of your matter and an invoice being issued to you.
For all matters we handle we do require payment in full into our trust account prior to the matter being finalised. Law firm’s trust accounts are subject to legislative requirements with annual reporting requirements and random audits to ensure there is no misuse of those funds.
This post contains general advice only and is not intended as legal advice.