Clients often ask how legal fees are determined. There is a mystery behind the numbers that appear in the retainer agreement. There may be tremendous differences in the fees charged by different legal providers, particularly between online legal resources and private attorneys. There may also be differences between the fees charged by experienced niche practitioners and new attorneys or general practitioners.

Tracy Jong Law Firm believes in transparency. Even when we charge on a fixed fee basis, we disclose our hourly rates. We also believe in educating our clients about issues that affect their business. Let’s start by explaining how legal fees are determined. We also want to help our clients understand that one hour of an experienced attorney’s time almost always costs less than several hours of an attorney who is less familiar with the issues. So what are some of the factors that go into determining a legal fee?

1. the time and labor expended, and whether it is performed by the attorney personally or administrative staff;
2. the skill, specialized knowledge, and responsibility required to perform the services properly – is this a standard vanilla matter or a complex situation with important nuances?
3. the importance of the matter to the client – will the outcome affect your bottom line or the viability of your business?;
4. the results achieved- will the outcome have a dramatic impact on your business?;
5. the urgency and circumstances in which the matter is undertaken and any time limitations imposed, including those imposed by the client. If other matters have to be delayed to attend to an emergency, or the firm’s staff has to work extra hours, especially nights, weekends and holidays, the firm will have to pay overtime and incur additional costs to provide this level of service;
6. the degree of risk assumed by the lawyer in undertaking the services, attributable to amongst other things, the amount or value of any property or money involved- does the attorney risk non-payment? Is payment made up front or over time in a payment plan?
7. the complexity of the matter and the difficulty or novelty of the questions involved – will this matter take extra legal research to develop a strategic argument because it is a novel question of law or unusual factual circumstances?;
8. the experience, reputation, and ability of the lawyer(s) and the firm performing the work;
9. the possibility that the acceptance of the particular client or matter will preclude engagement of the lawyer by other clients because of the time that must be devoted or conflicts of interest;
10. whether the fee is fixed, conditional or contingent (whether in contentious or non-contentious work);
11. the reasonable costs of running a practice;
12. the fee customarily charged in the market in the locality for similar legal services;
13. the quality of the work undertaken;
14. whether working with the matter or the client has intangible benefits to the attorney; and
15. the nature and length of the professional or personal relationship with the client.