Your lawyer is providing a service to you and like most service providers they will often charge you. It is important that you know the costs involved when dealing with your lawyer.
Whether you are charged at all or how much you are charged also depends on whether you are using a private lawyer (who will charge you, unless they are doing pro bono work), a community legal centre (who will usually not charge you) or Legal Aid NSW (who will charge you in some situations).
Costs agreements and costs disclosure
Your lawyer may give you a written agreement about costs. This is called a 'costs agreement'. Costs agreements must be in writing. Make sure you read the agreement carefully and ask any questions about it before you sign it.
A lawyer does not have to give you a costs agreement but if your case is going to cost more than $750.00 before disbursements and GST, your lawyer must 'disclose their costs'. A costs disclosure tells you how the costs in your case will be calculated. It should include:
- An estimate of costs and how they will be calculated or
- The fixed amount that will be charged.
The costs disclosure must also include information about:
- your right to negotiate a costs agreement with your lawyer
- your right to receive an itemised bill from your lawyer
- your right to negotiate how you want to be billed
- your right to complain to the Legal Services Commissioner if there is a dispute about costs.
If the total legal costs are not likely to be more than $3,000 before disbursements and GST, your lawyer may give you a standard costs disclosure form rather than making full costs disclosure.
If you are given an estimate, this is not a quote, and the amount stated may change. If the amount is likely to change significantly the lawyer should give you a further Costs Disclosure.
The lawyer should disclose their costs before they start working for you, or as soon as possible.
If your lawyer has not disclosed their costs, you may be able to challenge the bill. For more information, see
Complaints about a bill.
How lawyers charge
Lawyers charge for:
- professional costs and
Professional costs are charged for the lawyer's time, effort and expertise. Professional costs can be charged a number of different ways. You may be charged:
- a fixed amount
- an hourly rate
- no win, no fee.
Lawyers can charge a fixed amount for a case. For example, for the sale of a house they may tell you it will be $900.00 including disbursements.
If the lawyer does not tell you a fixed amount they may charge hourly. Each hour is usually divided into 10 units, so 1 unit equals 6 minutes. If the lawyer charges $300.00 per hour and they spend 1 unit, or 6 minutes or less writing a letter, you will be charged $30.00. If they spend 8 minutes, you will be charged 2 units, which will be $60.00.
A lawyer may charge you on a 'no win, no fee' basis. This means if you do not win your case, you do not have to pay their costs. However, you may still have to pay the disbursements. You may also still have to pay the legal fees of the other person or people involved. If you win your case, your lawyer will usually take their fees from any amount paid to you (with your permission).
Disbursements are charged for costs such as photocopying and any items that are paid for on your behalf, such as court filing fees, barristers' fees, medical reports.
If you do not sign the costs agreement and continue to instruct your solicitor, the costs agreement can still be enforced.
What can and cannot be charged
Your lawyer can charge you for a range of legal work that they do for you, including:
- phone calls or emails they make or receive about your case
- the time they spend drafting documents for your matter
- the time they spend reviewing your case and preparing for court
- attending court on your behalf.
Your lawyer cannot charge you for:
- preparing a costs agreement
- preparing an itemised bill.
For some areas of law there are maximum fees that a lawyer can charge. For example:
- motor vehicle accident compensation
- personal injury claims
- deceased estates (up to the grant of probate).
If you sign a Costs Agreement, which states the lawyer will charge you more than the regulated fee, you may have to pay this amount.