Understanding Different Fee Arrangements: The Winright Difference
Educate Yourself on Different Fee Arrangements: How Most Lawyers Charge VS How Winright Law Charges
There are a number of different types of fee arrangements that lawyers may be agreeable to. Ultimately, it depends on the particular circumstances of your case.
The following are different types of fee agreements that may potentially use be used for your case:
Different Fee Arrangements
(1) Hourly Rate
The legal fee payable is based on the time spent by the responsible lawyer and other members of staff handling the file. The lawyer will record the time spent preparing letters and documents, dealing with telephone calls, attending meetings, preparing for and attending court and for all other time spent reasonably on the matter. The legal fee is then calculated by the number of hours and fractions of hours spent multiplied by the lawyer’s hourly rate. Taxes and disbursements are payable in addition.
For example, if a lawyer records 10 hours preparing for and attending a court hearing and the lawyer’s hourly rate is $200, the legal fee will be 10 hours x $200 = $2000 plus taxes and disbursements.
(2) Fixed Fee
The legal fee charged by the lawyer for a particular item of work is fixed at an agreed amount, regardless of the time spent. The fee part is fixed: taxes and disbursements are charged in addition.
As an example, if the lawyer agrees to charge a fixed fee of $500 to prepare and file a Notice of Claim, the legal fee is fixed at $500. As well as $500 the client will pay HST or other tax on that amount plus the fee for filing, the court fee, any copying charges and any taxes payable on those further amounts.
The fixed fee may be higher than an hourly rate bill or it may be lower than an hourly rate bill. Typically a fixed fee will be offered where the work required can be easily ascertained, such as the preparation of a particular document or attendance for a fixed amount of time at a Court hearing. A fixed fee will not be appropriate for a more complex matter where the amount of work required can not be determined at the outset.
(3) Capped Fee
The legal fee charged is set at an agreed maximum amount. The lawyer working on the matter will record his or her time and will bill for the time spent on the matter. If the fee based on time spent (see “hourly rate” above) is less than the agreed capped amount, the fee is limited to that amount plus applicable taxes and disbursements. If the fee based on time spent on the matter is more than the agreed capped amount, the bill for legal fees will be limited to the capped amount plus applicable taxes and disbursements.
For example (based on a lawyer’s hourly rate of $200):
(a) The fee for representation at a one day trial is capped at $7500. The matter is settled before trial after the lawyer has spent 20 hours working on the file. The legal fee is $4000 plus taxes and disbursements.
(b) The fee for representation at a one day trial is capped at $7500. The matter proceeds to a one day hearing. The total time spent by the lawyer working on the matter is 50 hours. The legal fee is restricted to the agreed $7500 capped amount, as opposed to $10,000 had an hourly rate been agreed. Taxes and disbursements are payable in addition.
A capped fee arrangement may be appropriate for a simple matter where the work involved can be easily determined at the time the retainer is signed. For example, an immigration appeal or a small claims action have certain fixed steps so that the lawyer can advise the total estimated cost and an agreement as to a maximum fee can be agreed. A capped fee agreement will not be offered where the steps to be carried out cannot be determined at the time the retainer is signed and where the time likely to be spent on the file will be governed by factors outside our control.
(4) Contingency Fee
In most circumstances, the legal fee charged will be based on an agreed percentage of the net amount you recover. These are typical in personal injury cases where the lawyer has assessed your case and believes you will most likely recover some amount of monies. Payment of the lawyer’s legal fees will depend on whether there is a result in your favour. On the other hand, if you lose the case, then the lawyer may receive no legal fees for their work rendered.
How Winright Law Charges
Fixed Fee Arrangements or Mixed Fee Arrangements
In certain circumstances, it may be possible to offer a mixture of the fee agreements set out above. For example, it may be agreed that the cost of filing a claim at Court be fixed at a particular amount, that the fee for attending a hearing be capped at an agreed amount and that the costs of further preparation and trial be charged at an hourly rate.