Sole practice lawyers and those from smaller offices may be feeling the pinch of the slowing economy, with many of the average fees they charge down from a year ago, according to Canadian Lawyer’s 2009 legal fees survey.
This year’s survey once again looked at 26 fees charged across eight practice areas. These practice areas are civil litigation, corporate, criminal, family, immigration, intellectual property, real estate, and wills and estates. In addition, Canadian Lawyer wanted to know whether the change in the economy has led lawyers to lowering their fees, keeping them the same, or raising them.
The results are broken down nationally and across three regions of the country, Ontario, Western Canada, and Quebec and Atlantic Canada. The survey is also broken down by size of office: four lawyers or less, five to 25 lawyers, and 26 or more lawyers.
The fees listed in each chart represent average amounts. For example, the minimum fee of a bail hearing is the average fee charged by respondents and doesn’t necessarily represent the lowest amount recorded. Some respondents may not have indicated their province or firm size, therefore their answers are included in the national fees ranges charts but not in the regional breakouts.
As is the tradition of previous legal fees surveys, more than 70 per cent of respondents came from sole practice or smaller firms of less than 25 lawyers. In all, 193 lawyers answered our survey. This year’s survey had one major difference from those in the past, a broader national focus. In 2008 more than 70 per cent of respondents came from Ontario, this year the percentage of lawyers from Canada’s largest province fell below 60 per cent. Making up the difference were more than 32 per cent of responses coming from Western Canada.
A regional focus is important because different parts of the country can mean drastically different fees. “We find [the] Maritime market expects corporate commercial services to be priced about 50 per cent of Toronto rates,” one respondent commented.
More than half the lawyers surveyed said they would be keeping fees the same or lowering them in 2009. Meanwhile, nearly 48 per cent of those surveyed said they will raise fees this year. The average reduction in fees is between five and 10 per cent, while the average increase is between zero and five per cent.
Reduced average fees showed up in 18 of the 26 categories nationally. These included areas of civil action appeals, corporate secured finance agreements, contested divorce, separation agreements, residential real estate sale and purchase, and complex wills.
Comparatively speaking, Ontario fees in almost 55 per cent of the categories have been reduced. Meanwhile, more than 60 per cent of Ontario lawyers responding to the survey say they will reduce or keep fees the same in 2009 from the previous year. “There is always another lawyer willing to do the work for less . . . [it’s] difficult to keep fees at a reasonable level and remain competitive,” says one survey respondent.
While another respondent noted, “fees are all over the map. It’s more client dependent than anything else. Some clients want and can pay for Cadillac service and get it, others want and can pay for something else.”
Even though the fees were lower in the 2009 survey compared to those in 2008, there are some lawyers who believe the cost of legal services is still too much. And that is not simply a function of what lawyers are charging per hour. “It makes me heartsick to see clients spending $50,000 to settle custody access and very small property claims (under $20,000),” says one respondent. “I charged $200 per hour on that fi le, and it still was through the roof.”
Respondents also said they off er fees with a client focus, and diff erent approaches to billing, including blended rates and fixed fees. “We off er contingent fees, fi xed fees, and combinations of hourly rates and bonus billing. They are offered to convenience the clients,” says one respondent. “Ninety five per cent of the time I quote block fees; most of my clients prefer that to hourly rate,” says another respondent.
The client focus can also mean charging certain rates based on a client’s economic situation. “I sometimes discount my rates for those of modest means. I block fee divorces,” says one lawyer surveyed.