How Lawyers Charge

by Jacqui Brauman

How Lawyers Charge

by Jacqui Brauman

by Jacqui Brauman

Getting a large legal bill is a fear a lot of women have, and it can prevent them from getting advice at all. Knowing how lawyers charge can help you work out what sort of lawyer you want to find; a government lawyer versus a private lawyer, or even how to push back against fees if how they’re charging is not what you want.

You can pick and choose who you work with, you don’t just have to go to the first person that you find.

We have Medicare in Australia, so that covers medical expenses, but we don’t have an equivalent which covers your legal expenses. Even though the rule of law is so important in Australia, access to justice just doesn’t get the funding that it should. So there’s only a certain amount of funding for legal aid services each year that come through.

Legal Aid

There are government lawyers who provide legal services to the community through Legal Aid, but it’s restricted to certain areas of the law and it’s very restricted as well to asset and income tests. So only about 8% of people qualify for that sort of support.

Private lawyers also often subcontract to Legal Aid and do some legal aid work. That’s not to say that every private law firm will do Legal Aid work.

If a private firm does do Legal Aid work, they might have a limit to the number of legal aid cases that they want to take on. And not only that, then they’re also subject to actually submitting it into Legal Aid, to get it approved, to even get the funding in the first place.

Community Legal Centres

There’s also another section of funding that is paid by the government to community legal centres.

Community legal centres have to work out how best to use that funding. So they will only take on certain kinds of work, and again, have pretty strict requirements to be able to act for someone. So if you do fit within any of those categories, then reaching out to legal aid or to a community legal centre is potentially a good way to go.

Community legal centres often have a service that you can at least get some initial advice, even if they cannot take on your case. So they can be a good place to start – like the Victorian Women’s Legal Centre.

The Gap

Otherwise, if you can’t get into that sort of government or community funded legal assistance, then you are looking at private legal firms.

I’m aware that only potentially 20% of people can afford private legal, so you do have this major gap in the middle – between the 8% who can get funding and the 20% who can afford private.

There are a whole lot of other dispute resolution services that potentially fill some of that gap. I have information about lots of those alternative services in the hub.

lawyer website

Pro Bono

In terms of private lawyers, then you’ve got some law firms that do pro bono work, so they will do it partly or wholly for free or a discounted rate.

Now, large law firms have their own criteria about what sort of matters they’ll take on and how many at any particular time. So if you can get into a pro bono scheme, then great, but again, they’ll only take on certain kinds of work for pro bono and they’ve only got a limited amount of people and time that they can dedicate to that as well. So you’re not guaranteed to be able to get support in a pro bono area either.

No win, no fee

Then you’ve lawyers who do no-win,-no-fee work. No-win-no-fee work only lends itself to certain types of law. Not every area of law will work in a no-win-no-fee arrangement. This is usually only the kinds of law that have some kind of insurance company that the claim is being made against, so it’s more likely that there will be some kind of payment, which is why law firms are willing to do no-win-no-fee, because it’s more of a risk. So things like TAC claims, work cover claims, negligence claims, those sort of things are often picked up by lawyers who will do no-win-no-fee.

Now, if you use a no-win-no-fee lawyer, they will take a far larger percentage of what you get as compared to another lawyer who might do it under another fee arrangement.

Other private lawyers

So what are the other fee arrangements that all the other private lawyers work under?

(Remember that no matter which of these types a lawyer uses to work out legal fees, some will need funds upfront, and others might agree to you paying at the end).

Hourly billing

So a lot of lawyers will work on an hourly basis. You pay for their time.

A lawyer has to set out in a cost agreement at the beginning of the matter what their hourly rates are, what is the sort of work they will do, and what’s excluded from the scope of the work that they’re required to do.

Fixed fee

More and more firms are moving to fixed fee as well. So a fixed fee quote will either be a set fee or an estimated range.

Sometimes though, because there’s a lot of uncertainty upfront and it’s hard to work out what the fixed fee might be, those fixed fees might change at different points in the matter, so it might have to continually be readjusted.

But shorter transactional matters certainly lend themselves really well to fixed fee. So if you are doing a transactional sort of legal matter, then you probably would prefer to lock it in at a rate rather than looking at an hourly arrangement.

Scale of costs

Then there’s also a scale of costs arrangement. So a little bit like an award wage, the Courts, for certain litigation matters put out what’s called a “Scale of Costs”. If a lawyer will agree to work to a scale of costs, they will stick to what the court has published, and it’s basically like a fixed fee per line item of what needs to be done. So you could go through a scale of costs and basically work out a fixed fee with all the line items of what needs to be done.

Value billing

Then the final sort of way lawyers charge, and it’s a bit newer, is value billing.

For value billing, you and the lawyer will sit down and actually work out the scope in much more detail and work out what value it is to you, for them to do that work. That sort of billing lends itself much more to a larger, longer sort of work that might be ongoing. It probably lends itself more to big business sort of work as well, rather than private client individual work or transactional work.

For a short transactional matter, it probably isn’t worthwhile going into a value billing arrangement, because the time it takes to work out the value billing at the beginning might even be as long as it takes to do the transaction anyway!

Assessing how a lawyer charges

Many lawyers still don’t provide their fixed fee arrangements on their website, but I don’t see why they shouldn’t.

So if you’re looking around to vet lawyers, look on their website, see what pricing arrangements they have.

Before you engage a lawyer, they have to provide you with a cost agreement anyway, so you don’t have to proceed with them beyond seeing the cost agreement.

Some lawyers provide a free initial appointment, but they don’t have to.

Use a free initial appointment, if you can get one, to work out how someone works and how they’re going to charge, rather than trying to get advice out of them, because you really want to gauge whether you can work with someone, rather than trying to use that short bit of time to get as much out of them as possible.

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