Guide to Legal Bills

Disbursements

Lawyers’ bills include both fees and "disbursements". Disbursements are expenses incurred by a law firm on behalf of a client in order for the firm to proceed with that client’s matter. The law firm pays a third party for these expenses. For example, in a personal liability case, disbursements might include the cost of expert medical reports or private investigator reports. In most matters, disbursements also include costs such as photocopying, postage, and courier expenses.

Disbursements only represent expenses incurred on behalf of a specific client. They do not include the operational costs of a law firm such as rent or the receptionist’s salary. The lawyer’s bill should clearly state the nature of the disbursement, its exact amount and the date it was incurred.

Types of Fees

Recognizing the different ways lawyers charge their fees can help clients understand their lawyer’s bills. Lawyers base their fees on a number of different arrangements, usually determined by type of case involved.

Hourly rates represent the most common fee arrangement. A large range of hourly rates exists among lawyers, based on experience, expertise and ability. Clients should receive an estimate of the full amount required to complete the matter as well as being advised of the lawyer’s hourly rate.

Lawyers may charge block fees for their services for straightforward, easily defined matters. For example, a lawyer may charge a set fee for the preparation of a basic will. When comparing block fees from one law firm to another, clients should find out exactly what the fee includes to ensure they are making a fair comparison.

In some jurisdictions, lawyers can charge contingency fees for certain matters. This means that clients only pay if their lawyers succeed with the claim being pursued. A percentage of the money awarded to the client by the court represents the lawyer’s fee. Contingency fee arrangements should clearly state the method by which the fee is calculated.

The amount lawyers charge within a given fee arrangement varies significantly. Many factors contribute to determining the amount, including time, effort and the level of difficulty involved in a case, as well as the results achieved. Lawyers in urban areas usually charge more than those in small towns, and lawyers with more experience or a high profile will also charge higher fees.

Prepaid Legal Plans

Prepaid legal plans are available in some areas of Canada. Membership in these plans usually involves paying a monthly fee. This allows members to receive certain legal services as needed. Legal services provided by the plan usually include such matters as preparation of wills and powers of attorney, fighting traffic tickets, and seeking compensation for defective products, and may also include certain areas of family, real estate and tax law. When members have legal problems covered by the plan, they contact the company managing the plan, which refers them to a law firm that can handle the matter on their behalf.

Middle-income families who don’t qualify for legal aid but cannot afford to pay private lawyers’ fees may find prepaid legal plans very useful.

Natalie Fraser practised law in Whitby, Ontario for seventeen years and is now a freelance legal writer. She often writes for The Lawyers Weekly.