How Lawyers Charge Fee?
Most often than not when a client walks into a lawyer’s office he would first of all ask the lawyer how much he should pay the lawyer for a certain work to be done even without first giving an opportunity for the lawyer to assess the legal problem the client was facing. A lawyer may not be able to off-hand quote a fee without a proper understanding of the legal problem that the client is facing. Therefore, a lawyer will not be able to quote a proper fee when client ask by phone. The best thing is to see the lawyer personally and shopping around by phone for lawyers will not do justice to the client and lawyer. Before quoting a fee for a particular work asked by the client the lawyer has to consider a number of factors such as:
(1) The nature of legal problem the client is facing, whether it is about debt matters, personal injury claims, land disputes, hire –purchase, criminal charges etc.,
(2) The value of the matter in dispute;
(3) The length of time needed and effort taken to resolve the legal problem faced by the client;
(4) Whether there is a need to file legal proceedings, defence and or counterclaim in court;
(5) The importance of the case to the client;
(6) The complexity or novelty of the legal matter under consideration.
(7) Geographical Location – Fee may be higher as lawyers are always reluctant to travel to outstations.
(8) Outcome of case – in a debt collection case, the risk of no recovery of debt.
(9) Experience and prominence of lawyer – A well known and experienced lawyer in a particular area of law usually charge higher than a lawyer who is not.
(10) Overhead – The costs associated with the lawyer’s secretary, copies, books, legal research, and other items.
(11) Quality of work of the lawyer – Quality work comes with higher fee and client gets what is paid to skilful lawyer.
How much you as client willing to spend?
If the case involves a court fight, the lawyer may need to know how much the client would be willing to spend on him to take up the case. If the lawyer feels that the client may not be able to pay an upfront fee or will not be able to continue paying the lawyer his fees, the lawyer may just decline to take up the case. The rule is that good representation comes with good fee, but, the fee should not be unreasonable and for good representation the seniority, skill, the operating costs, location of practice and reputation of the lawyer handling similar cases in the past need to be taken into consideration in the negotiations between the client and the lawyer.
When shopping for lawyers, do not be embarrassed to ask the lawyer how the fees need to be billed and you may need to ask detailed questions. If the lawyer is not willing to discuss with you his fees and how he should bill you, this either shows that the lawyer is not willing to take up your case of he lacks the confidence to do a good job for you.
If your matter is contentious, expenses may include the employment of investigators, photographers, translators and experts witnesses. At times, in complex cases besides doing own research your lawyer may seek assistance from other lawyers to assist him or may wish to consult prominent lawyers who specializes in the area of law in dispute.
What Are The Typical Fee Arrangement?
In both contentious and non-contentious matters, upon taking up your case, the lawyer may require you to pay his law firm a registration fee to register your case with his law firm so that a file can be put up and maintained. After your case is registered, the lawyer may start work immediately in which you may be required to pay an a further fee or an engagement fee for interviewing and taking instructions from you, collection of information and documents, preliminary ground investigations, meetings with you and procuring information and giving instructions to intelligence sources, perusal of documents and preliminary assessment of your case. This engagement fee may exclude all other professional fees in connection with your matter.
The Advocates’ Remuneration Rules 1988 provides for fees lawyers in the state can charge for certain work done. Lawyers are not allowed to charge below the scale and if this is discovered the lawyer can be barred from practice by the court. Therefore, to say that a lawyer can give discount to you fee is incorrect or misleading, but, lawyers are allowed to give discounts or to absorb some miscellaneous expenses incurred by you, such as printing, mileage, telephone costs. However, for litigations or contentious matters the following typical arrangements between lawyers and their clients can be employed:-
- Hourly rates
- Flat fees
- Contingent fees
Hourly rate is a common arrangement in present practice and under this arrangement the lawyer gets paid an agreed-upon hourly rate for the hours the lawyer worked on his client’s case or until the matter is resolved. Only an experienced lawyer can tell a client the number of hours the lawyer would likely to spend on the case and this will then give the client the rough estimate the client need to spend on the lawyer handling the case.
Flat Fees are what lawyers typically charge for simple and well-defined cases. Examples of these flat fee matters include the preparation of wills, uncontested divorce, drafting of agreements, filing simple bankruptcy matters. You may need to know that the flat fee does not include expenses such as stamp duties, filing fees, search fees, fees for Commissioner For Oaths.
Retainer arrangements can take different forms and in some cases a retainer is a non-refundable fee paid for the privilege of retaining a lawyer with regard whether or not services are rendered. This type of arrangement normally is found in high profile cases or when client retains a high profile lawyer. A retainer can also be money advanced against future fees and costs which may or may not be refundable if not all to be used. Another type of retainer is where a lawyer is retained on monthly or yearly basis to give legal advice to client on a specific matter or to attend board meetings of companies of client regardless of how much time the lawyer will spend on the work or representation.
Contingent Fee is a fee arrangement where lawyers get a cut say 30% as fee the sum of money recovered or payable to client under judgment or settlement. However, contingent fees are not allowed here. On top of that, the lawyer may also require a nonrefundable upfront fee or retainer.
What about Expenses and Court Costs?
Client may need to discuss these with the lawyer of any anticipated costs so as to avoid unpleasant surprises. Client may need to scrutinize court fees, filing fees, delivery charges and charges for affidavits and so forth.
Get a Fee Agreement
It is quite difficult for lawyers to give the exact or accurate amount of fee and disbursements to be charged even in non-contentious matter, but, to prevent any confusion or misunderstanding client and lawyer should get the fee agreement in writing. If the lawyer is unprepared to commit his fee in writing client should better not engage him. Client may want to impose a ceiling on the fee and also want the lawyer to get client’s approval before proceeding beyond a certain amount of legal cost. The fee agreement also needs to mention how the fee and charges are to be collected by the law firm. If no fee agreement in writing how client will be able to dispute fee when a bill is sent to client’s office?
Under the Advocates’ Remuneration Rules 1988 once a bill is issued it carries 14% interest per annum upon the expiration of one month. Clients are therefore advised to pay their lawyers’ fees promptly because the interest is very high.
Quality of Work – Client get what is paid
Fees may vary from one law firm to another in the same kind of work and this normally depend very much on the experience and quality of work of the law firm concerned. A big law firm may seem reputable, but, this does not mean that big firms are competent or able to give quality work to their clients. Quality work comes with higher fee but clients, most often do not realize law firms could not produce quality and competent work when fees are low.
For example, in preparation of wills, lodgments of caveats and in non-contested divorce cases, some law firms may take months to prepare the necessary documents and further delay may come when the fees are low. This is because work with low fees is considered to be non-productive in terms of income to the law firm and the law firm will be more prepared to work on cases which provides the law firm with better income. At times, due to delay in preparing the necessary documents, goals and objectives could not be achieved. Clients may not have the Wills signed but died exposing his estate subject to huge estate duties to government and delay in distribution of his estate to the beneficiaries because Letters of Administration may take longer time to be granted by Probate Office or Amanah Raya Berhad when a person died without a Will. In divorce cases, a child can be born out of wedlock with lover or partner as client could not get remarried without a divorce being granted by court in time. There can also be break-up in relationship with lover or partner due to delay to get a divorce. A failure to prepare the necessary documents in lodgment of caveat can see the property to be caveated being sold off thus depriving the interest of the client in the land.
Lawyers normally may not wish to argue about their fees with their clients when clients complained that their fees are too high and this is common for cases in preparation of tenancy agreements and also in contentious matters. In tenancy agreements clients may not realize that when clients argue about fees, important words, clauses or phrases may not be incorporated into the agreement to give better protection to clients. The lawyer will provide a cheap stuff to the client if low fees can affect the running of the law firm of the lawyer. If the engagement involves litigation cases, the lawyer fed-up with delay by clients in payment of fees or where the fee is too low, may try to rush the case in court, thus, may jeopardize the client’s case.
Therefore, client need to understand that client gets what client pays. A competent law firm with quality work tends to demand slightly higher fee from another firm for same work done. Think about it if you think the fee of your lawyer is a bit high.
Why same nature of case, yet, fees chargeable are not the same?
Client may also need to understand that although cases of same nature may be non-contentious, but, fees for each case chargeable by the same lawyer may differ. For example, in Will cases, the difference of fees and charges chargeable could be caused by the value of property involved. This is because the higher the value of property involved, the higher will be the fee and charges chargeable by the lawyer.
Likewise, in divorce cases the difference in fees and charges chargeable could be caused by the attitude or behavior of the client, such as delay by client to supply information and documents and the value of matrimonial property involved. Divorce is a sad phase in a person’s life and it hurts, but, clients usually find peace of mind and comfort speaking to their lawyers for hours and hours, thus, depriving precious time of lawyers from doing work his work. Caused by loss of time, the lawyer may take consideration of time spent with the client when charging his client. To the lawyer, time is money.
The status of client in society and nature of profession or business of client may also influence the fee chargeable.
Therefore, it is a misconception to say that every case is the same and fees should be the same.