This blog is right up there with “how much does it cost to hire a lawyer?” and there are as many answers as lawyers out there!
But if you’re looking to retain a lawyer in the province of Ontario, there are three types of structures you can expect to see and which one your lawyer will use depends on their area of practice:
1. Flat fee
Lawyers who deal with more transactional work, like wills and estates, incorporations and real estate deals, employ this fee structure.
For example, a real estate lawyer may charge you $1500 and the break down will include certain services like a title search, registering your mortgage, etc.
It will also include disbursements. These are out of pocket expenses that your lawyer incurs on your behalf. For example, the city might charge the lawyer a small fee to do the title search, and the lawyer will include that on your invoice.
More and more lawyers are putting flat fees on services because the public likes them and, for these kinds of services, I think they’re great.
2. Hourly
Most family lawyers will charge an hourly rate and upfront retainer fee.
The hourly rates are not based on the size of the case or the outcome. You are paying the lawyer for their work throughout.
Generally, the fee is set by the firm and is the same for a $10k case as a $10M case. $400 an hour is $400 an hour no matter how many hours your lawyer logs.
When a lawyer uses an hourly billing system, don’t expect them to provide you with a simple quote. It’s tough to anticipate what is going to happen in any kind of lawsuit. Some of the more experienced lawyers *may* be willing to ballpark your case but, without a crystal ball, their guess is as good as yours.
One thing to anticipate with firms that charge hourly is the upfront retainer. They won’t start your case for free. It’s not uncommon for lawyers to charge $3k, $5k, $10k or more. The better the lawyer (and the bigger the firm) the more your retainer will cost you.
As for average hourly fees? There’s no such thing. Hourly fees are all over the map depending on where you live, the size of the firm, and the experience of the lawyer.
Does a larger hour fee mean the lawyer is better? Not if you hire a lawyer in a big firm where it’s mostly junior lawyers and other staff who do the heavy lifting.
3. Contingency
Contingency fees create access to justice for people who otherwise can’t afford it.
As a personal injury lawyer, this is how I bill.
Contingency fees are based on there being a recovery i.e. you only pay if you receive a settlement, which is why so many people prefer contingency fees over a big, upfront retainer.
But there are a few things to be aware of with contingency fees:
- Language: Most personal injury companies will advertise that “you don’t pay unless we win,’ and that makes me cringe. The correct language should be “you only pay when we recover a settlement for you.” Okay, it’s not nearly as catchy, but it’s TRUE. You see, you don’t win or lose a case Hollywood-style, a personal injury lawsuit is about a long term negotiation for the right settlement.
- Disbursements: Even if your personal injury lawyer is unable to obtain a settlement for you (and this is rare – if we take your case, we do so because we believe we will both get paid) you are still responsible for those out-of-pocket expenses I mentioned above. If you are paid, the disbursements are settled above and beyond the lawyer’s percentage.
- HST: Don’t forget about the HST! Most clients don’t even think about it until that 13% is added to the lawyer’s fee. Unfortunately in the province of Ontario, we all must charge HST. It’s a big chunk that I wish I didn’t have to charge, but I do, so expect it.
Why Are Lawyers So Secretive About Fees?
It’s true that most lawyers don’t like to talk openly about fees.
Part of this is simply characteristic of the industry. Even though we’re getting savvier about marketing and customer service, the legal profession is still, at its heart, very traditional. You’ll see fees advertised on legal websites about as often as you’ll see doctors advertising their rates on websites.
Also, don’t expect to negotiate fees with your lawyer either. While I fully encourage you to ask questions and understand the fees inside out, most firms/lawyers consider their fees to be non-negotiable. If you feel the need the question the value of your lawyer, then you need to find one whose work you do value.
Finally, remember that, whomever you hire, they should work with you closely and not just send an army of articling students your way. I think this is key to the successful resolution of any case regardless of the fee structure.
