How much do Lawyers cost (really)?

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Generally, citizens know very little about their rights but they certainly know one thing: lawyers are expensive! In this article, we will expose: general lawyer costs, their remuneration, their hourly rates and other financials concerning the profession. We will answer the famous question: where do these high costs come from?

High incomes but a wide disparity

In the public’s perception, lawyers are well-paid. This impression is justified, since the median salary of lawyers is substantially higher than that of the general population. On the other hand, as we can see in the table below, there is a wide disparity between the salaries of women and men. A troubling situation that cannot easily be explained by the simple fact that women in the profession are comparatively younger.

Table 1: The Median Pay Scale [i] 

20082014
Men$87,500 – $123,050$110,001 – $130,000
Women $62,500 – $70,570 $90,001 – $110,000

Not all lawyers are rich

Despite the relative overall wealth of lawyers, wealth is unevenly distributed amongst them. In the following table, it can be seen that almost one-third of lawyers in a jurisdiction earn below $70,000.[ii]

Table 2 [iii]

A lawyer’s hourly rate

Huge hourly rates are often put forward to explain why lawyers are economically inaccessible. However, the actual median hourly rate is between $101 and $150. This rate is high, but keep in mind that half of lawyers ask for less than $150 per hour for their services. At a national level, the average Canadian hourly rate is higher: $211 per hour.[iv]

Even if these rates are high, they are not disproportional to the rates of other non-regulated professions. This should really be translated into total costs that would prove to be reasonable, but it is not the case. The numbers in the next paragraph will demonstrate how expensive lawyers’ services actually are. The reasons to explain this are simple: a lawyer’s work is long and complex. Moreover, unlike other professions, lawyers have not or have scarcely automated their processes: the large majority of services are still done manually.

What is the total lawyer cost?

Therein lies the real question. The following table shows how expensive it is to obtain justice if the issue is of a civil nature. The figures in “Table 3” represent an average and we are aware that many cases can be substantially cheaper. However, even when everything goes well, and the other party acts in good faith, one could expect to pay at least an average cost of between $5,000 and $10,000. For both parties, this will cost a total of $20,000. Thus, if the amount to be won at the end of the whole process is below $20,000, economically speaking, it is generally not appealing for a party to try and obtain justice.

Table 3: Average Total Costs of Legal Services[v]

  • Procedure or Provided Service
  • A two day civil lawsuit
  • An incorporation (SME)
  • Criminal trial for a minor offence
  • Divorce (contested)
  • Basic Employment Contract
  • Sales contract (residential property)
  • Mediation (up to 3 days)
  • Normal Average Costs
  • $25,517
  • $761
  • $2,814
  • $7,824
  • $768
  • $808
  • $8,822

Source: Canadian Lawyer Magazine

Court delays and complexity are also responsible for the high costs

Finally, in addition to the exorbitant costs that can be associated with procedures, delays must also be taken into consideration. Despite the fact that they can vary from one region to the next and according to the jurisdiction, the latter can range from eight months to more than three years. This waiting and uncertainty represent significant additional costs for all the parties.

Complexity of procedure is a major cost factor for lawyers. The more steps they need to take to defend a person the more it will cost parties in the long run. Unfortunately, it sometimes takes years to go through the judicial process. These costs are passed down to the clients.

What can one do to lower lawyer cost?

We recommend three principles to manage your disputes. First of all, make a conservative calculation of future costs by learning about what usually happens in cases like yours. We also advise you to make this assessment with a clear head, since given the long delays, you will possibly find yourself in front of decision that is more economic than emotional.

Secondly, we suggest that you use the available technological tools as much as possible and to do a part of the work yourself. A demand letter drafted by a lawyer can cost you $1000 while drafting it with an online service can cut costs by 10. This system also automates simple legal actions, which will also substantially diminish costs. A lawyer can advise you on what to do on your own and when you should use the tools.

Finally, request that the lawyer with whom you will be working, use modern business methods and efficient technological tools. For example, the lawyer can offer a fixed price for his or her services, or he can use tools that automate his processes so that it will cost you less. Remember that if the lawyer does all his work “by hand”, without any technological tools, it is you who will be obliged to pay the hefty bill in the end. However, keep in mind that not all services can be automated. It is the lawyer’s duty to provide you with a range of options for you to choose from, before going forward with your case.

Do-it-yourself !

The best way to reduce lawyer cost is to do part of the work yourself. You can draft a letter of demand using online help, negotiate online and draft the legal action online. This could provide savings in the thousands of dollars.

By doing it yourself on BidSettle.com, you can cut your costs by 10.

[i] Quebec bar statistics are used in this article. They Quebec Bar, Barreau-mètre 2015, p. 32.

[ii] Quebec Bar, Barreau-mètre 2015, p. 34.

[iii] Quebec Bar, Barreau-mètre 2015, p. 33.

[iv] Canadian Lawyer, The Going Rate 2016.

[v] The costs used in this table are an average for Canada. See: Canadian Lawyer, The Going Rate 2016.

BidSettle.com or how legal tech can make you save a lot of money.