How do lawyers work out their charges?

Currently in Australia the most popular method for costing legal matters is to charge the client per 6 minute unit. You will usually be notified of the hourly rate charged by your lawyer, representing 10 x 6 minute units. Rates will differ depending on the years of experience or expertise of each lawyer.

Activities which take less than 6 minutes, say a short phone call confirming an appointment which takes about 2 minutes, will usually be recorded and charged to you at 6 minutes; activities that fall within a 6 minute unit, say 20 minutes, will be charged at the rate for a complete 6 minute unit, so for 20 minutes you will be charged 4 units.

Legal firms tend to charge you for everything, even a call to say hello and talk about the weather is likely to be charged to you. If you call or email your lawyer every other day to check up on things, you are likely to get a high bill at the end of the month.

Some firms only charge you for the legal work conducted, and not all the additional administrative work that is required, for example: filing, word processing, data entry, sending faxes etc. For those firms, the hourly rate charged to you for the legal work is supposed to be sufficient to cover all the extra administration. Other firms will charge you for an administrator’s time in additional to your lawyer’s time.

Any costs incurred on your behalf, like barristers’ fees, court filing fees, stamp duty etc, are all payable by you. Many firms will also pass on to you the costs of postage, telephone calls and photocopying.

If your matter is going to cost more than $750, lawyers are required by law to provide you with a costs agreement setting out how they calculate their fees. If you don’t understand the costs agreement, see What is a legal costs agreement, ask your lawyer about the details, or speak to the local law society.

To find out more go to http://www.legaleasy.com.au/