In general, a lawyer’s bill is in two parts.

1. Professional services – a fee for performing the actual work. Most lawyers charge an hourly rate, which reflects their skill and experience in a specialist area. The overall fee can be influenced by the complexity, urgency of the work and several other factors.
2. Other expenses – these are fees or other charges the lawyer may incur on your behalf. These are known as disbursements and may include court filing, barrister’s fees and other expert’s fees, bank charges, travel expenses, stamp duty, courier’s fees, attendance fees (to serve or collect documents), photocopying fees and company or other search fees.

How lawyers charge fees

Lawyers can charge fees in different ways¹ and it is up to the lawyer and the client to agree on this.

Hourly rate

Many law firms charge at an hourly rate. This means that the client is charged for the total time lawyers spend on their work at an hourly rate (lawyers within the same firm will have different hourly rates depending on their experience and role within the firm). You should ask about these before you decide to instruct the lawyer.

Fixed fee

Another way of charging is a set or ‘fixed’ fee. This means that the lawyer and client will agree what the client will pay for the work at the start. This type of arrangement could include an agreement to complete the work in stages and charge a fee at the end of each stage. The lawyer and client may discuss and agree on fees going forward at the same time.

Fee estimate

When you initially instruct a lawyer, they must provide you with information about the basis on which fees will be charged, including when and how they are to be paid.

On request by a client, a lawyer must provide an estimate of fees and inform the client promptly if it becomes apparent that the fee estimate is likely to be exceeded.

The way fees are to be charged and the terms of any fee agreement should be clearly recorded in the lawyer’s engagement letter and lawyers are required to provide this type of information to you when they start acting for you.

We have some tips to help you discuss fees in advance.

Payment

Payment arrangements are an important part of the fee discussion. Make sure you are upfront and honest with your lawyer about any issues or concerns you might be having with paying your fees.

Your lawyer may be willing to make a payment arrangement to assist you. Each individual lawyer or law firm can decide whether to offer a payment plan (or not), but some potential arrangements include:

• Paying in instalments as the work is being done.
• Paying once the matter is completed.
• Paying a fee in advance (this must be held by the lawyer in a lawyer’s trust account and charges can be deducted by the lawyer only with your authority).
• A conditional fee (based on success) – a conditional fee agreement must be in writing and must include certain details² such as the way the fee will be determined and when and how the fee will be payable. There are some types of work that a lawyer can’t enter into a conditional fee agreement, like criminal, family court or immigration proceedings.

Legal aid

Depending on your financial situation, you may be entitled to Legal Aid. Legal Aid is government funding to pay for legal help for people who meet certain eligibility requirements and otherwise could not afford a lawyer.

As a client, your lawyer is required to inform you if you may be eligible for Legal Aid, however this does not mean that your lawyer is in a position to work on legally aided matters.

To find out whether you are eligible for Legal Aid, visit the Ministry of Justice’s website.

¹See Chapter 9 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008

²See rule 9.10 of the Lawyers Conduct and Client Care Rules for a full list of details that must be included in a fee agreement