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Saturday, October 26, 2019

Do you know how much your lawyer is billing you?

Last week I dealt with a case where a client hired me to represent her at a taxation of a lawyer's account. That's a process whereby an independent person appointed by the courts reviews the lawyer's bill (with the lawyer and the client present) to see if the bill was reasonable or not.

In this client's case, the lawyer worked for her for about 18 months. During that time, the client did not receive a bill, sign a contract, or see a fee schedule. And yes, she did ask more than once to receive a bill but the lawyer failed to produce one. Eventually, the client and the lawyer parted ways in mutual frustration, with the case not resolved. The lawyer presented a bill for almost $50,000. This is when the client found out she was being charged $400 an hour.

This sort of thing happens every now and then. In response to this, the Law Societies across Canada have set down rules meant to produce transparency in lawyers' billing of their clients. The goal is to ensure that clients know how much they are being billed for the work. This, of course, doesn't guarantee that the client will love the hourly rate, but at least they'll know what they're getting into.

When you begin working on a case with a lawyer, you should receive, in writing, information about billing. This is referred to as a retainer letter, even if you are not asked to give retainer funds in advance. The letter should cover:

  1. A summary of the work you've asked the lawyer to do (e.g. obtain a divorce, contest a will, sue the insurance company, etc.).
  2. How the lawyer is billing you, whether that is by the hour, on a contingency (whereby the lawyer takes a cut of a settlement), or a set fee for the job.
  3. If there is an hourly rate, the exact amount of that rate
  4. The amount of funds, if any, that must be paid to the lawyer up front before the work begins
  5. Which disbursements (expenses such as printing, postage, court filing fees, couriers, etc) the lawyer expects to charge you for
  6. When you should expect to be billed (i.e. at the end of the case, once a month, etc.)

Hopefully, in your first meeting with the lawyer, you discussed fees and timelines. The information about billing that you remember from that meeting should match up with the information in the retainer letter. If it does not, call the lawyer's office right away for clarification.

It's stressful enough having to deal with a lawsuit. Having to then turn around and challenge the lawyer's bill is yet another expense and more time and stress.

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