When you first meet with your lawyer, or soon afterwards if you decide to hire them, your lawyer should give you information about:
- their legal fees and how they are calculated
- interest charged if you do not pay your bill on time
- out-of-pocket expenses (disbursements).
A lawyer must not charge or accept a fee or disbursement, including interest, unless it is fair and reasonable and has been disclosed in a timely fashion. ( Rule 3.6-1 Code of Professional Conduct for NS Lawyers)
Fees are what lawyers charge for their legal services, including their time, expertise and skills. Fees should be fair and reasonable, and your lawyer should let you know about them in a timely way. What is fair and reasonable will depend on factors like:
- time and effort needed and spent
- lawyer’s experience and abilities
- difficulty and complexity of the issues
- what is at stake for you (for example, amount of money, importance to you)
- any estimate or range of fees the lawyer gave you
- fee arrangement you were told about and agreed to
- the outcome of the case.
Disbursements are out-of-pocket expenses paid to third parties on the client's behalf, like:
- couriers, printing, postage
- long-distance telephone, faxing
- service of documents (process server)
- court filing fees
- government fees
- medical reports
- expert fees.
Do not be afraid to ask questions. You need to have a good, professional working relationship with your lawyer, and that includes being comfortable talking about the expected costs involved, and bills you get. Lawyers have an obligation to explain the basis of fees and disbursements they charge.
Tight budget? Ask your lawyer about flexible fee arrangements like flat fees, a contingency fee, or a Limited Scope Retainer.
Flat or fixed fee
Lawyers may charge a flat fee for services like:
- a will, power of attorney, personal directive
- an uncontested divorce
- incorporation of a company
- real estate purchase and sale
- a first consultation.
The lawyer’s out-of-pocket expenses (disbursements), if any, will generally be extra though. Ask your lawyer for an estimate of those expenses.
Lawyers usually bill on an hourly basis. Your lawyer’s time on your case includes things like research, telephone calls, emails, texts, letters, meetings, legal document preparation, discoveries, and court or tribunal appearances. A lawyer’s hourly rate usually depends on the lawyer’s years of experience - newer lawyers are generally less expensive than more experienced lawyers. The general range is from about $150 to $500 an hour.
A contingency fee is a percentage of the money the lawyer gets for you if successful. If you win, the lawyer gets the percentage agreed on as the lawyer's fee.
...a lawyer may enter into a written agreement...that provides that the lawyer’s fee is contingent, in whole or in part, on the outcome of the matter for which the lawyer’s services are to be provided (Rule 3.6-2 Code of Professional Conduct for NS Lawyers)
Lawyers often use a contingency fee agreement in lawsuits where the client cannot pay up front, such as for a personal injury claim. If you lose the case, you do not pay the lawyer any fee. However, you may still have to pay the disbursements.
The percentage is open to negotiation between you and your lawyer, but must be fair and reasonable. The percentage is based on factors like: the likelihood of success, nature and complexity of the claim, expense and risk of going ahead, amount of expected recovery, and who is to get an award of costs.
A contingency fee agreement must be in writing, and must include certain terms and conditions that come from Rule 77.14 of Nova Scotia's Civil Procedure Rules.
Most contingency fee agreements say that if you decide to change lawyers you will usually need to pay the first lawyer for the work they did on your file up to that point.
A contingency fee agreement is a contract with your lawyer. Read it carefully and be sure you understand its terms before you sign it. You may want to review the agreement with another lawyer before you sign it.
Most lawyers will ask you to pay a retainer fee up front when you hire them, unless you have agreed on a flat fee, contingency fee, or other fee arrangement. A retainer is a lump sum of money provided to a lawyer when you hire them. The retainer is kept in the lawyer’s trust account, and covers legal fees and other expenses for the legal work. It is also sometimes referred to as a retainer fee. The amount of the retainer fee varies from lawyer to lawyer, and depends on the case. The lawyer will do work until the retainer runs out, and ask for a new retainer if more work needs to be done, or until the legal work is done. After the legal work is done, any balance left after the lawyer's bill is paid would be returned to you.
You may also be asked to sign a retainer agreement, sometimes also called an engagement letter. A retainer agreement is a contract with your lawyer.
A retainer agreement establishes the lawyer-client relationship, and may cover things like:
- how much you can expect to pay (ballpark estimate)
- fees, disbursements and other costs
- retainer amount (if applicable)
- billing format, when bills are due, and interest charged if you do not pay your bill on time
- scope of the retainer: what you have hired the lawyer to do, and what you have not
- whether work may be delegated (for example, to a paralegal, articled clerk, associate, administrative support staff)
- withdrawal, transfer or termination of services
- how communication will happen (for example, email, phone, letters, etc)
Full Scope Retainer or Limited Scope Retainer?
Full Service/Scope Retainer: The lawyer will provide full representation, dealing with all aspects of the matter from start to finish, to resolve the client's legal problem.
Limited Scope Retainer: The lawyer provides legal services for part, but not all, of a client’s legal problem, by agreement with the client. This is sometimes also called 'unbundled legal services'.
Examples of a Limited Scope Retainer are where a lawyer:
- drafts or reviews court documents, like pleadings or a brief, as a 'ghost-writer'
- only does part of a court process, like questioning a witness (direct or cross-examination), or doing a sentencing hearing
- advises about whether a client should accept a proposed settlement or transaction, like giving independent legal advice on a proposed separation agreement
- provides outside court logistical and strategic help to a self-represented litigant, sometimes called 'coaching'.
Representing Yourself? A Limited Scope Retainer or 'unbundled' legal services may be a good option.