Do legal costs baffle, scare, or intimidate you? Understanding them is a vital step in getting the best legal advice for your issue. Read on to understand legal costs and how a lawyer normally charges so you can solve your problem once and for all.
* 6 min read *
Is a legal problem keeping you up at night? Are you afraid to find a lawyer to help you because you feel you can’t afford or understand the legal costs? You probably know someone who got ripped off by their lawyer. Or maybe you’ve heard that legal advice costs an arm and a leg. Horror stories such as these often prevent people from dealing with their legal problems.
When something bad happens, like buying a defective car or an unfair dismissal from work, for example, the best starting point in solving the issue would be to get legal advice. And for sure the first question anyone would ask would be, “How much will it cost?”
You will be surprised that usually, lawyer’s fees aren’t as straightforward as it should be. When you check for costs, you will often be faced with a web of numbers, conditions, and computations that may compound your problem even more. You may even abort your search for a solution altogether.
The uncertainty of how much you need to shell out or if the cost is worth the fight is a huge roadblock to seeking legal advice. Not being able to receive the resolution or compensation one deserves leads to feelings of despair and anxiety. In fact, a report shows that the ability of a person to enforce their rights can have a profound effect on their well-being and quality of life.
If you’re now going through a legal issue, read on to have a clearer view of how much it would cost to legally deal with your problem so you can finally get the peace of mind that you deserve.
How Lawyers Charge? Fixed Fees v Hourly Rates
Marie Curie once said that, “Nothing in life is to be feared, it is only to be understood". She may be talking about a scientific discovery at that time but it may very well be applied to understanding your legal fees. If you are armed with the right information on how lawyers charge, there is no reason to be afraid of hiring a lawyer. It’s about time you get help dealing with perhaps an annoying debt collector or a workmate who’s been bullying you for months.
Under the law, law firms are not allowed to charge legal fees based on a percentage of the value of your claim. A lawyer can only charge for the services and work that was actually done. Legal costs are dependent on the nature and scope of the legal issue.
Generally, you pay the lawyer’s professional fee. This covers the lawyer’s time, expertise, and effort. It may include giving legal advice or preparing and reviewing documents or court letters. You may be charged through the following ways:
- Fixed Fees
This means that you and your lawyer agreed on a fixed price for the legal services. At Essia Law, we take fixed fees seriously. You pay for the job and not for the hours rendered. You name your price for the legal advice that you need, and we will find a lawyer who can give you the service for the price that you have set.
If your advice requires more work, thus a higher price, we will make it clear upfront so you can choose to proceed or not. If you decide to go with our Fixed Fee Bundles, such as the Estate Planning Suite, we will inform you upfront if they are the perfect fit for you so you can either upgrade or refund. Also, though not mandated, fixed fees are strongly encouraged by our lawyers.
Life is already complicated as it is, that’s why we spare you from hidden charges or nasty surprises. Fixed fees will allow you to take control of your life and your finances.
- Hourly Rate
For some clients, hourly rates or billable hours are what nightmares are made of. It has been linked to instances of lawyers charging for trivial expenses or unrealistic workload. Despite its reputation, it is still a common standard practice in the country.
In an hourly-rate scenario, your lawyer records the time he has spent on your legal issue. The costs are typically billed in 6-minute intervals. For example, you call a lawyer to ask a question that lasted for just a minute, you will still be charged for six. For a lawyer that charges $600 per hour ( a usual rate for a partner), that one-minute call would have cost you $60 dollars.
You then send them a follow-up email which they read in ten minutes - that’s another $120. Fees charged this way can really add up and can put a strain on your bank account.
To give you an idea, here are some common hourly rates in Australia. These rates are also subject to an inflationary increase of 10 to 15% per year.
Common Hourly Rates of Lawyers in Australia
Senior Partner / Principal: $600- $700
Senior Lawyer: $250-$350
Junior Lawyer: $200-$250
What Else Can My Lawyer Charge?
Aside from the professional fees, your lawyer may also charge the following at cost and depending on your legal case:
- Court filing fees
- Medical Reports
- Sundries such as photocopying, printing, and stationery
- Other third-party services paid on your behalf
- Courier Fee
- Government Fees
- Expert Fees
It is important to note that your lawyer cannot charge you for preparing your bill or your cost agreement.
Do I Pay for Initial Consultation?
A legal consultation is the first meeting with your solicitor. It allows you to gauge if your lawyer is a perfect fit for your case. On the other hand, it also allows your lawyer to determine if they can represent you based on what you have disclosed.
It is important to note that lawyers normally make you pay for an initial consultation (which could be up to $750/hr) before telling you if you have a case and how much it will cost.
Even after the initial consultation, a lawyer rarely tells you the price, rather they give you a fee estimate that may have little relationship to the final bill you get. So you may think it's going to be $1000 and then it turns out to be $2500.
Lawyers are required to update you when circumstances change and that is going to change the estimate. But imagine already being halfway through the work you thought was going to be $5000 and now it has become $8000. Are you going to say no? Do you cease work and just pay the $4000 of work the lawyer has already done?
No one wants to be in that frustrating situation, especially when you have other unexpected expenses to deal with. We at inAdvisor, understand that. It is why we have included the initial consultation with our bundled services. In our Divorce Application, for example, you get an hour of initial application as part of the package. You don’t have to worry about being charged for every minute that you tell your side of the story.
What is a Cost Agreement?
Before you begin your client-lawyer relationship, you will need to sign a cost agreement. Make sure that you are comfortable with the terms and conditions of the agreement. Check what’s included in the scope of work, how the fees are charged, and if it matches with the price you agreed upon. Don’t hesitate to ask your lawyer any questions you may have before signing. Clarify terms you do not understand and ensure that you are both on the same page.
A cost agreement must include the following:
What Should be Included in a Cost Agreement
✔ The cost of the legal advise or service
✔ Modes of Communication
✔ Disbursements and other costs
✔ Retainer amount (if applicable)
✔ Scope of the retainer (what you have hired the lawyer to do)
✔ Withdrawal, termination, or transfer of services
Why Do Lawyer's Fees Vary?
There’s a big chance that you have already searched online for lawyer’s fees. If you’re lucky enough, you may have seen their fees published on their website. But more often, lawyers do not disclose this information online. You would only find a price range or an estimate. You would notice that prices, including estimates, vary. So, why are fees different anyway? Solicitor fees are often based on the following factors:
- Seniority - Work carried out by a junior solicitor will cost less than work done by a partner of a firm.
- Location - Services in regional or rural areas are often lower than in metropolitan areas.
- Expertise - You pay more for a specialist in a particular area of law than a non-specialist. Patent lawyers, for example, usually charge more than an estate lawyer.
- Urgency - If your need is more urgent, be prepared to pay a higher price.
Where Do I Find a Lawyer?
The total cost of hiring a lawyer will ultimately depend on the extent of your issue and the lawyer you engage. A fixed-fee arrangement will save you money in the long run. But remember that a low fee does not equate to good service. You still have to do your homework- compare and research before hiring a lawyer.
inAdvisor has significantly reduced the work you need to do in choosing a lawyer that will match your budget and needs. We know your hands are full so we make understanding legal costs easy for you.
For straightforward legal advice, you simply ask a question and state the price you think it is worth. We will then match a lawyer for your needs and budget.
For more complex legal issues, you can request a quote and we will provide you with quotes from different lawyers to choose from. You then compare and choose which one meets your preferences.
You can also choose cost-effective bundled services such as a Will and Estate Planning Suite, Divorce Application, or Start-Up Packages.
We will always find ways to make legal easy and simple because we believe everyone deserves good value legal advice and ultimately, a good night’s sleep.