There’s been a lot of news about lawyer’s fees. This may be a good opportunity to review how lawyers bill clients in Ontario. In Ontario, there are essentially three ways that a lawyer can bill a client. They can charge a flat fee for specific services, an hourly rate for the time they spend working on your file, or a contingency fee which a percentage rate of the settlement that is the outcome of the case.
The first way they calculate fees is a flat fee. Lawyers may charge a flat fee for simple services like notarizing a document, or performing very straightforward similar services. Generally, the amount of time required to perform a flat fee service is very predictable and therefore it is easy to set a flat fee for them.
The second type of fee structure involves an hourly rate for their services. This method of billing is most often used when the amount of time to handle a case is not easily predicted. Examples would be for law suits or criminal cases. The lawyers will have a set fee and they will track how much time they spend and bill you when the work is done. There is often a retainer required when you hire a lawyer on an hourly basis. The retainer ensures that there is money available to the lawyer to make disbursements required in your case, and to pay his or her staff as the work progresses. The total bill should show your retainer fee as a credit. Billing to the minute is not uncommon.
There is no ‘standard’ lawyer rates, as a lawyer is a business. Their overhead varies with the size of their practice, how many staff they have, where they are located, and the nature of the work they do.
The third method of billing is a contingency based. This means that the lawyer will examine your case, and if it is likely that the case is winnable they will agree to take it on for a percentage of the settlement at the end. This is advantageous for the client as they do not have to pay anything up front for legal representation, however, unscrupulous lawyers have taken advantage of clients using this billing method.
Ontario allows certain kinds of litigation to be pursued with a contingency fee structure. The structure is laid out in the Solicitors Act. The contingency fee rules state that there must be an agreement between the lawyer and the client that is in writing. It must state:
the percentage that the lawyer will receive from any amount recovered, and that it excludes any amount received as costs or disbursements
the conditions under which the fee is to be paid
allows the client to collect full payment for an award of costs, even if it exceeds the amount payable under a contingency fee agreement, if the award is used to pay the client’s solicitor
a statement that the client has the right to make all critical decisions regarding the conduct of the matter
if the client is a plaintiff the lawyer shall not be paid more in fees that is recovered in damages from the lawsuit
a sample of how the fees will be calculated
a description of what the disbursements are, and whether the client is responsible for the payment of them (or are they included in the fee) and whether the client or lawyer is responsible for the taxes.
The Act allows the court to review contingency fee agreements, and clients may ask for a review under certain conditions. Contingency fees can range from 10-45% depending on the nature of the case and the lawyers involved. It is up to the client to determine if the proposition is a fair one.
As the client, you are responsible to hire and pay the lawyer for the services performed. You are responsible to understand how you are billed, what extra costs are, and that you discuss all the billing details before you sign anything. You should also stay on top of the costs accrued throughout your file. You should be comfortable with the lawyer you select, particularly in personal injury, family law, or criminal law cases where their may be significant time involved settling the case. You should have initial meetings with a few lawyers to determine what the range of fees is, how much experience a lawyer has, and whether you believe that they will be a good fit for your needs. You can also try to negotiate the fees your lawyer proposes.