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How Much Does a Lawyer Cost? (2021 Update)

How Much Does a Lawyer Cost? (2021 Update)

Want to know how much hiring a lawyer will cost? Find out how your lawyer will charge and how to minimise your fees here.

28th January 2021
Reading Time: 6 minutes

Legal advice isn’t a cheap commodity. In fact, one of the biggest hurdles to people and businesses getting the legal help they need is the cost. However, understanding how lawyers charge for their work can help you know what to expect. In this article, we’ll explain all the factors that go into legal fees, so you can get an idea early on of how much your lawyer will cost.

Varying costs

Lawyers charge all different sorts of rates, starting from the low-hundreds per hour for a junior lawyer to $11,000 per day in Court for an experienced barrister. These disparities come down to seniority and experience in the profession. As with many industries, the more experience a lawyer has, the more they will charge for their time.

However, many people expect that lawyers charging higher rates will always provide better legal services – this isn’t always the case. How much your lawyer will cost depends on many things.

Some of the factors that determine what your lawyer will cost include:

  • The complexity of your legal issue
  • The level of experience of the lawyer working on your matter
  • Assistance provided by other members of staff (i.e. clerks and paralegals)
  • How much stationary, documents and other materials are used
  • Whether a barrister is briefed
  • Filing fees
  • Whether your matter is urgent
  • Requirements of the law firm (set rates)
  • Whether any expert witnesses give evidence

1. Professional Fees

Professional fees are what a lawyer charges for their expertise, time and experience. Lawyers spend many years studying the law and how to get the desired outcomes for their client. Despite this, a lawyer will always have to spend time understanding your matter and finding the correct legal solution. These fees do not include incidentals such as filing fees, stationary, search fees, postage or copying. It’s important to note that professional fees (unlike Court filing fees) also attract GST, meaning that 10% of the cost will be added to your bill.

Fixed-fee

Fixed-fee arrangements are becoming more common for legal matters as clients look for more customer-friendly ways of accessing legal services. For straightforward matters such as issuing a letter, drafting a will, or reviewing a contract, your lawyer may quote the cost up front. This means that you won’t be charged on a time-cost basis and will know exactly what your lawyer will cost before you hire them. Fixed-fee structures are becoming increasingly popular amongst clients and lawyers, as lawyers do not need to spend extra time recording every task they undertake on your matter. Further, there are online marketplaces where you can find a lawyer who will provide you with an up-front quote.

Example

You have hired a local lawyer, Jessica, to draft and send a letter of demand on your behalf. Jessica has said that to draft, review and send the letter it will cost you $200. You can be assured that if you pay this cost up front, then you won’t receive any bills for the work down the line.

For more complicated legal matters, it is less likely that you’ll be charged a fixed-fee. If your legal matter is ongoing (such as one where legal proceedings are on foot), then it may be hard for a lawyer to quote your cost upfront and will bill you based on their hourly rate. However, it’s important to always ask up front if your lawyer can provide you with a fixed-fee quote for the job.

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Hourly rates

Many lawyers charge their fees on a time-cost basis. This means that they charge based on the amount of time they spend working on your matter. In most cases, this is set by an hourly rate. For example, a junior lawyer may charge $330 per hour, or a paralegal $190 an hour.

Some common hourly rates are:

  • Senior partner or principal – $600 – $700 per hour
  • Associate – $350 – 450 per hour
  • Lawyer – $250 – $350 per hour
  • Junior lawyer – $200 – $250 per hour
  • Graduate – $150 – $250 per hour
  • Paralegal – $100 to $200 per hour

These rates also usually see a slight annual inflationary increase. This usually falls somewhere between the 10 to 15% mark.

Retainer fees

When you hire a lawyer, they may request to be paid a retainer fee. Retainer fees are common amongst law firms, especially if they will be doing work for you on a continual basis. This money (say, $5,000) is then held on trust as security, and used to cover your fees when you give express authority, or when you cannot pay your bills. It’s important to remember that a lawyer cannot reallocate or use these funds if you have not given your permission or are up to date in paying your latest legal bill.  

Timesheets

Solicitors and other professionals (such as accountants) will often keep a record of the work they have done by keeping a timesheet. A timesheet records the date, description, client, and amount of time (billing units) spent on a task.

The timesheet is then put into software and used to calculate a client’s bill. Solicitors will also often have minimum billing targets, for example, that they have to bill for 6 hours of work per day. If you request an itemised bill, you will see the tasks loaded into the timesheet which account for the fees charged to you.

Billing units

Many lawyers bill in time units. Most often, this is broken down into 6 minute units. A lawyer will list on their timesheet the number of units applicable for each task they have performed for your matter. To put this in perspective, a task that takes your lawyer 30 minutes will equate to 5 units of time. It’s also important to note that solicitors will round up their units, so something that takes 8 minutes will still count as 2 units, rather than 1.

Example

Your lawyer, Jessica, has drafted a letter of demand on your behalf. The letter took her 40 minutes. Jessica lists this on her timesheet as 7 units. If Jessica charges a rate of $400 per hour for her work, this means she will charge $40 per 6 minute unit. This means for the 7 time units of work completed, you will be charged $280.

2. Other costs

Aside from professional fees, you will also have to pay filing fees and disbursements. Disbursements include external services, such as taxi fees to and from Court, and barristers fees. Smaller fees for things such as printing costs and stationary can also be referred to as ‘sundries’ on your invoice. Although these seem like minor costs, they can add up very quickly. Requesting that your lawyer do all work electronically where they can may reduce your costs for printing and stationary use.

3. Fee arrangements

Understandably, legal costs can seem expensive and hard to keep track of. Some solicitors will account for this and have arrangements where the costs can be more manageable.

Some of these include:

  • An hourly rate with a ceiling (maximum fee)
  • A costs estimate which has been negotiated between yourself and the lawyer
  • No win, no fee (the solicitor will only charge you if your case is successful)

4. Keeping track of your costs

To keep track of your finances, talk to your lawyer about any anticipated fees, such as filing fees or delivery charges. This will avoid the appearance of any nasty surprises along the way. You can also request to pay these fees upfront and not through your lawyer.

Also, keep it transparent. Ask your lawyer for a quote for costs for his or her legal services, and get this fee agreement in writing. You can also ask:

  • If the first meeting is free or discounted
  • How much, and when you will have to pay

You may also ask for a detailed bill of your legal services, usually within 30 days. Receiving an itemised bill will help you see where the time on your matter has been spent.

5. Where to find a lawyer

How much your lawyer will cost ultimately depends on the legal issue you are facing and the lawyer you engage. If you want to save costs, entering into a fixed-fee arrangement will save you money in the long run. Further, you can compare, search and hire lawyers on our online marketplace, where you will only be charged on a fixed-fee basis. For a more detailed list of costs involved with common legal jobs, you can check out our legal pricing menu. Although lawyers are known to be expensive, there are ways you can mitigate the costs and make sure you’re getting value for your money.

Don’t know where to start?
Contact a Lawpath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

Author
Jackie Olling

Jackie is the Content Manager at Lawpath and manages the content team. She has a Law/Arts (Politics) degree from Macquarie University and is a solicitor in NSW. She's interested in how technology can help shape the future legal landscape.