Legal Fees

How Lawyer’s Charge for Legal Services
What Does Contingency Fee Mean
Hourly Rate Billing Explained
How Does Justin W. Anisman Charge for Legal Services?

How Lawyer’s Charge for Legal Services

Because legal fees and the costs of hiring a lawyer should not be a mystery, let me explain how legal fees work in Ontario, how lawyers charge for their services and the various options available to individuals and businesses.

Legal fees can be charged a few ways. Most commonly, however, lawyers charge either an Hourly Rate or a Contingency Fee. Which options are available and what is the bestchoice depends on the legal issues, as well as the complexity of the matter, the risks and merits, and a client’s ability to pay while the case is ongoing.

In case you are wondering, I am happy to work on either an hourly basis or contingency fee depending on what makes sense in your individual case. But read on to understand the difference, and the pros and cons of each choice.

Other Legal Fee Questions:

What is a Retainer?

Most lawyers will require new clients to pay an amount of money as a “retainer”. The retainer is held in the lawyer’s trust account and is there to cover any legal fees or disbursements charged by your lawyer.

Retainers are often larger where a lawyer is working on an hourly basis, however, are often required even where a case is being taken on a contingency fee. In the case of contingency fees, the retainer is used to pay “disbursements”.

What is a Disbursement?

Most lawyers will require new clients to pay an amount of money as a “retainer”. The retainer is held in the lawyer’s trust account and is there to cover any legal fees or disbursements charged by your lawyer

Lawyers are not permitted to profit from disbursements. Clients must only be charged the actual cost of the disbursement the lawyer paid on the client’s behalf.

Do Lawyers charge HST?

Yes. Clients are required to pay HST on their lawyer’s legal fees, whether hourly or on a contingency.

All Legal Fees in Ontario are Subject to the “Fair and Reasonable” Requirement

A contingency fee is when your lawyer agrees to be paid only from the proceeds of any settlement or Judgment. In other words, it is the fee arrangement popularly advertised on TV, radio and on the sides of a bus—”You don’t pay unless we win!”.

Rule 3.6-1 of the Rules of Professional Conduct state that:

3.6-1.    A lawyer shall not charge or accept any amount for a fee or disbursement unless it is fair and reasonable and has been disclosed in a timely fashion.

What is fair and reasonable depend on the circumstances but include:

• the time and effort required and spent,
• the difficulty of the matter and the importance of the matter to the client,
• whether special skill or service has been required and provided,
• the amount involved or the value of the subject-matter,
• the results obtained,
• fees authorized by statute or regulation,
• special circumstances, such as the loss of other retainers, postponement of payment, uncertainty of reward, or urgency,
• the likelihood, if made known to the client, that acceptance of the retainer will result in the lawyer’s inability to accept other employment,
• any relevant agreement between the lawyer and the client,
• the experience and ability of the lawyer,
• any estimate or range of fees given by the lawyer, and
• the client’s prior consent to the fee.

All lawyer’s fees in Ontario, whether hourly, contingency, or otherwise, are subject to assessment under the Solicitor’s Act. What this means is that if you believe that your lawyer’s fees are unfair or unreasonable,whether hourly, contingency, or otherwise, you can start a fairly simply process through the Civil Court Office to have the fees assessed under the Solicitor’s Act.

Other Billing Methods

There are several other billing methods, including a fixed or flat fee for the performance of a single task, regardless of how much time is spent, or a fee for each stage or step in a matter. Some lawyers are more flexible in their billing arrangements than others, but you should never be afraid of raising the subject with your lawyer.

What Does Contingency Fee Mean?

A contingency fee is when your lawyer agrees to be paid only from the proceeds of any settlement or Judgment. In other words, it is the fee arrangement popularly advertised on TV, radio and on the sides of a bus—”You don’t pay unless we win!”.

Contingency fees have both advantages and disadvantages. When you are a terminated employee, with no income and no ability to pay legal fees on an ongoing basis, a contingency fee might be the only practical way you can retain a lawyer. In that way a contingency fee suppliesa vital role in improving access to justice. That said, it is important to consider that a contingency fee can end up costing more at the end of the day. If your lawyer can negotiate a quick settlement, then the contingency fee might be greater than the hourly

Many law firms encourage contingency fees because they have become very efficient at settling disputes and thereby make large premiums on their clients. For this reason, it is important to consider all your options before agreeing to a contingency fee.

What Percentage Fee is Reasonable?

The Lawyer’s Rules of Professional Conduct explain that:

In determining the appropriate percentage or other basis of the contingency fee, the lawyer and the client should consider a number of factors, including the likelihood of success, the nature and complexity of the claim, the expense and risk of pursuing it, the amount of the expected recovery and who is to receive an award of costs. The lawyer and client may agree that in addition to the fee payable under the written agreement, any amount arising as a result of an award of costs or costs obtained as a part of a settlement is to be paid to the lawyer. Such agreement under the Solicitors Act must receive judicial approval. In such circumstances, a smaller percentage of the award than would otherwise be agreed upon for the contingency fee, after considering all relevant factors, will generally be appropriate. The test is whether the fee in all of the circumstances is fair and reasonable.

What is proper in your circumstance depends on the factors of your case and should be arrived at after a reasonable discussion with your lawyer.

Hourly Rate Billing Explained

By far the most common way lawyers charge clients is based on the actual time spent working on their client’s file. As lawyers work on your individual file, they keep a record of the work done and the time it took. These are called “dockets”. For example, a lawyer might record 0.3 hours (18 minutes) “telephone call with opposing counsel regarding settlement offer; and email to client reporting on same”. In this way, when you get your invoice, you get a clear understanding of what was done, when and how long it took.

Different lawyers charge different hourly rates. Some of the most experienced senior lawyers at the largest international law firms can charge thousands per hour while less experienced junior lawyers much less. The hourly rates a client will be charged should be known in advance. Lawyers will typically include their hourly rate in a retainer agreement or engagement letter.

Different lawyers charge different hourly rates. Some of the most experienced senior lawyers at the largest international law firms can charge thousands per hour while less experienced junior lawyers much less. The hourly rates a client will be charged should be known in advance. Lawyers will typically include their hourly rate in a retainer agreement or engagement letter.

The work required on your file should be distributed in a cost-effective manner. Properly resourced lawyers will use students, junior lawyers, law clerks and legal assistants (with lower hourly rates) to keep your legal costs reasonable.

How Does Justin W. Anisman Charge for Legal Services?

Justin W. Anisman is happy to work on either an hourly rate or a contingency fee, depending on the circumstances of his client’s case. He strives to ensure that his clients understand the costs involved in litigation and are informed each step of the way. If you have any questions or concerns, Justin is always available for a free consultation to discuss.