Amounts paid to a law practice for the provision of legal services.
One of the overriding principles of the Legal Profession Uniform Law is to “promote the administration of justice and an efficient and effective Australian legal profession” by “empowering clients of law practices to make informed choices about the services they access and the costs involved”.
The Legal Profession Uniform Law has applied in NSW and Victoria since July 2015. More recently, since July 2022, it has also applied in Western Australia. Under the Uniform Law, more than 17.5 million people in these three states may enter into a retainer with over 5,000 law firms. The intention is that clients make informed choices with knowledge of costs.
What are legal costs?
Where can a client find out about these costs?
Whenever a person wants to buy an item or service, a key question is: how much will it cost? Sometimes this is easy to answer. On other occasions, such as with legal services, it is more difficult.
A client can obtain information about fixed fees or hourly rates. A client may also know that legal costs must be “fair and reasonable”.
But what are legal costs?
The Uniform Law defines ‘legal costs’ as:
amounts that a person has been or may be charged by, or is, or may become liable to pay to, a law practice for the provision of legal services – including disbursements but not including interest.
Similar definitions exist in legislation in Queensland, South Australia, Tasmania, the ACT and the Northern Territory.
What are legal services?
The Uniform Law defines ‘legal services’ as work done or business transacted in the ordinary course of legal practice.
In simple terms, ‘legal services’ refers to any work a lawyer performs for a client.
What is included in legal costs?
Legal costs include:
- Amounts paid to solicitors for their work – commonly called “professional fees”.
- Amounts paid by solicitors on behalf of a client – called “disbursements”. These include court fees, service fees, and report fees. Law practices may also charge internal costs such as photocopying, printing, telephone, and postage.
- Amounts paid by solicitors to other lawyers – most commonly barristers and agents.
Some work performed by a lawyer is not chargeable to a client. For example, preparing costs disclosure, preparing invoices or bills, and work done after a retainer ends. This work supports the law practice rather than the client.
Informed choices
Lawyers must provide clients with an estimate of legal costs for the services provided. The estimate should include professional fees, disbursements, and counsel fees.
If lawyers fail to provide required information, or fail to give a reasonable estimate, their right to payment may be restricted.
How can Blue Ribbon Legal assist you?
At Blue Ribbon Legal, we assist both lawyers and clients with all aspects of legal costs, including liability to pay and fair and reasonable assessment.
If you have a query about legal costs, we provide guidance at every stage – before, during, and after the lawyer/client relationship. Please get in touch with our legal costs team.