The price of a lawyer will vary greatly depending on the seniority, practice area and type of work you require the lawyer to do. The gap can be as much as $150 per hour for a junior lawyer to $1,100 per hour for a barrister or partner!
This article breaks down the different legal costs charged by lawyers in Australia.
Author: Farrah Motley. Farrah is a Solicitor of the Supreme Court of Queensland, the Legal Principal of Prosper Law and an experienced commercial legal practitioner.
How Much Does a Lawyer Cost - an Overview
The table below summarises the range and average hourly rate for the various levels of seniority in the Australian legal profession.
How much you can expect to pay on a lawyer will of course depend on your individual circumstances and how large and complex your legal matter is.
You can see that there is a large range in the hourly rates amongst lawyers.
The reasons for the large price range for the different levels of seniority include:
the varying overhead costs of the law firm and the need to pass that cost onto the client;
the location of the law firm (law firms located in a busy CBD are typically more expensive than law firms located in areas with low population density);
the charge out rates of other similar law firms;
the complexity of the relevant area of law;
the technical skills, qualifications and calibre of the lawyer; and
the type of clients the lawyer / law firm provide legal services to.
It's important for anyone thinking of engaging a lawyer to understand that a higher hourly rate doesn't necessarily mean that you are dealing with a 'better' or more experienced lawyer. This is because the hourly rate that a lawyer is charged out at isn't only dependent on their level of experience.
It's common for larger law firms to charge a higher hourly rate. Large, international law firms are equipped to help large clients with complex and/or high volume legal matters, because they have large legal teams which can service those types of clients. This also means that those law firms will have higher operating costs and need to pass overheads on to clients through their charge out rates.
A law firm generally works out their hourly rates by building up the cost as follows:
1/3 to cover office overheads;
1/3 to cover salaries; and
1/3 for partnership share.
Even if a lawyer provides you with a cost to use their services, you can negotiate. If there is a different payment method, frequent or amount that suits you better, you can ask the question.
The cost of a lawyer is no different to any other professional consultant; it's open for discussion.
Now let's dive in to the different types of lawyers and how much, on average, you can expect to pay.
How Much Does a Lawyer Cost - Junior Lawyers
Junior lawyers usually cost between $200 - $300 (plus GST) per hour. Law firms generally use junior lawyers for simpler, time-consuming legal tasks. Therefore, although the hourly rate of a junior lawyer is lower when compared to their more expensive colleagues, the cost of a junior lawyer may make up a large portion of a client's bill.
How Much Does a Lawyer Cost - Associate Lawyers
Associate lawyers are a rank higher than junior lawyers. Considered to have mid-level experience, associate lawyers are generally charged out at anywhere between $250 to $400 (plus GST) per hour.
How Much Does a Lawyer Cost - Senior Associates
Senior associate lawyers are just that - senior. Their high-level experience and technical skills means that they can project manage a client's legal matters and because of this, they are charged out anywhere between $300 to $500 (plus GST) per hour.
How Much Does a Lawyer Cost - Partners
A partner of a law firm oversees the day-to-day work of employed solicitors, they guide the overall legal strategy of a matter and are the final 'quality check' for legal work. Because of this, partner charge out rates are high - as much as $500 to $1000 (plus GST) per hour.
How Much Does a Lawyer Cost - Barristers
A barrister is a highly specialist legal advocate. They are engaged directly by solicitors and charge between $250 to $1100 (plus GST) per hour. For a full day in court, the daily rate is typically 8 to 10 times the hourly rate. Anyone engaging a barrister for a full day of court can expect to pay between $2500 to $11000 (plus GST) per day.
Just like the cost of a lawyer, the cost of a barrister in Australian can vary greatly.
For a junior barrister who is undertaking pupillage or has recently passed the bar, their fees will be significantly lower than Queens' Counsel or Silk (the very senior barristers).
Members of the judiciary are typically selected from the ranks of barristers, so it's no wonder that the senior (QC / Silk) barristers can command such a high price.
How Much Does a Lawyer Cost - Legal Counsel
Legal Counsel are in-house lawyers, which means they are employed directly by their one and only client to provide legal advice. Because a legal counsel (much like a solicitor employed by a law firm) is provided with a guarantee of work through their employment contract, their "charge out" rate to their client is considerably lower than a private law firm lawyer.
Effectively, the hourly rate of a legal counsel can be measured by dividing their salary by the number of hours worked. The charge out rate of a legal counsel therefore differs considerably. Companies that employ legal counsel can expect to pay between $35 to $480 per hour.
Hourly Rate Versus Fixed Fee
Many law firms still charge their lawyers out in six minute intervals based on their hourly rate. Some even charge out at one minute intervals!
To demonstrate an example, Lawyer A is charged out at $600 per hour. If the firm is charging in six minute intervals (or a 'unit' as they are sometimes referred to), you will be charged $60 for every six minutes the lawyer works on your matter. If the lawyer works on your matter for, say, seven minutes then - you guessed it - you will be charged for two units ($120).
Alternatively, some law firms offer legal services on a 'fixed fee' basis. This means that the lawyer will cost you a set amount, regardless of how much time they spend on your matter. Fixed fee law firms are likely to cost less than law firms that charge out based of time, and clients have the certainty of knowing exactly how much they will be paying.
Clients have an increasing choice of fixed fee lawyers in Australia. Fixed fees can be better for clients because they know how much they are going to spend on a lawyer upfront and don't have any nasty surprises. Fixed fee billing can also be helpful for lawyers because they do not need to spend time monitoring and recording the time they have spent on your legal matter.
It may be difficult for a lawyer to provide you with a fixed fee quote if your legal matter is complicated. One way to get around this is by the lawyer breaking your matter down and telling you what the fixed fee will be for each 'chunk' of work. Just be aware that if the work required falls outside of the work that's been identified by the lawyer, you may be charged extra.
Disbursements and other Costs
The legal fees that you may be charged by a law may not only include the fees the lawyer charges. You may also need to pay for disbursements and court fees. Disbursements will include costs the lawyer has incurred from third parties, such as barristers' fees, taxis, accommodation and other travel costs, expert witness fees, private investigation costs, printing and other out-of-pocket expenses.
Court fees may include the cost to file documents at the court registry.
Your lawyer should tell you about these costs as soon as they become aware of them, and before they incur those costs on your behalf.
How Much Does Prosper Law Charge?
All of Prosper Law's fees are fixed.
This means that we will let you know the price you will pay for your legal matter before you start work. Our fees are not based on hourly rates. Instead, we charge our client's based on the value of the work we do. Because of this, we have an incentive to always be on the look out for ways to offer more efficient legal services to our clients, without compromising on quality.
Contact us today for a no obligation, fixed fee quote from an Australian lawyer.
Want to read more? Check out this article which explains how to read a contract.
Author: Farrah Motley | Legal Principal
PROSPER LAW - A Law Firm for Businesses
M: 0422 721 121