Legal Fees Explained
By Hans John Kalina
Let’s talk about legal fees.
The topic of legal fees is very often misunderstood by our clients. First and foremost, clients need to acknowledge that the lawyer is a business person. Legal services are the product and the lawyer’s livelihood is entirely dependent on the client’s payment for those services. The fees and services are always clearly set out in writing in a retainer agreement. In addition, there are terms and conditions applicable to all of our services that can be accessed at: https://lawyer4u.ca/agreement_terms.
There are a number of models for determining how much a lawyer will be paid. Generally, there is the hourly rate, a block fee and a contingency fee. The Law Society of Ontario only allows for contingency fees (a percentage of the winnings) in some civil cases. In the types of law our firm practices, we are prohibited from charging contingency fees.
An hourly fee is just that, a fee per hour for services performed. In our office, this type of billing is usually reserved for lengthy complex matters such as criminal trials or contested family proceedings, where it is difficult to determine how much work will be required for the case. Clients generally don’t like this model because there is no certainty on how much they will be required to pay for the case. In some instances, such as when we receive our compensation from Legal Aid Ontario, there is a cap on the number of hours that a lawyer may bill to any one file. This means that any work performed by a lawyer in excess of the ‘capped’ number of hours will be unpaid work.
The block fee is what we use most often in our practice. This means that there is a fixed amount that will be charged to the client for the service. The fee is based on an average of how much time we expect it will take to complete the matter. The advantage to the client is that they can predict with relative certainty how much the legal service is going to cost them. From the lawyer’s perspective, getting the job done quickly and efficiently is advantageous to everyone.
The block fee includes meetings with our client, preparing documents, reviewing documents, reviewing supporting material, reading correspondence, writing correspondence, interacting with the court or tribunal, obtaining instructions and reporting to our client. Our obligation always remains to our client to ensure that they are being served professionally.
Once we are engaged in the proceedings, our professional responsibility is always placed before our financial compensation. This can sometimes operate to a disadvantage to us. For example, in non-criminal matters, the interactions may take much more time than we anticipate. This is often due to difficulty in obtaining information or completing the required documentation. In most cases, it is due to circumstances that are neither the fault of the client or the lawyer. Either way, we do not get paid for the additional time that the case takes.
In criminal cases where we are charging a block fee, there may be some variation in payment based on outcome, trial versus guilty plea or withdrawal of charges. However, the number of court appearances to achieve the result in irrelevant to the payment calculation. There have been many instances, where we have been required to attend court on behalf of a client, only to have the matter adjourned to another day, many times over. This may occur through no fault of ours or our client. Delays in receiving disclosure from the prosecutor are particularly frustrating in this regard. It may also occur due to delays in obtaining reports from other professionals, drawn out negotiations, difficulties in courtroom scheduling or simply our client being unsure on how they wish to proceed. Ideally, we would like to complete the case in the shortest time possible, however, given the vagaries of the court process, we may be required to attend many court appearances. Our fee does not increase, yet we continue to be required to attend court, meet with a prosecutor, our client and perhaps a judge, all to move the case along on behalf of our client. Our client is always advantaged by this model because we work in the best interest of the client.
Clients charged with criminal offences for whom we are being paid by Legal Aid Ontario are in many ways differently situated. Contrary to public perception, a legal aid certificate is not a “free ticket”. The fee that we are permitted to charge is much lower and limited by restrictions. Legal Aid Ontario files are paid either a modest hourly rate capped to a very limited number of hours or subject to a block fee. The block fee is also subject to strict conditions. In some cases, we will not be paid at all. This may happen if we are required to remove ourselves from the file due to a conflict of interest. In that case, the new lawyer will receive the benefit of the block fee and we will receive nothing. Of course, as professionals, it is our client’s best interest that comes first. The only reason for accepting legal aid certificate is because we are doing best to assist those disadvantaged people who require our services the most.
There is a lot of work that occurs ‘behind the scenes’ in any legal proceeding. That is the skill and expertise that our clients pay us for. From our perspective, it’s a matter of balancing our obligations to you, our client, along with our professional duty to the court or tribunal and the practical realities of running a business, all while obtaining a fair compensation for our services. Read https://lawyer4u.ca/role-of-defence-counsel-in-a-criminal-proceeding/ for insight on the fundamental decisions the client is responsible for in a criminal proceeding.
© 2019 Hans John Kalina is a lawyer with the Law Office of Kalina & Tejpal. He can be reached at (416) 900-6999 or at [email protected]