COST OF DOING BUSINESSJanuary 25th, 2017
provided by Lisa Dewar
As in any workplace, revenue is required to pay the workers. Lawyers often charge for their work on an hourly basis, so it may appear that they are extremely well -paid. However, in a law practice the hourly rate of the lawyer relates directly to the cost of doing business (known as overhead). Overhead costs include office space, telephones, printers and other office equipment, advertising and website design and maintenance, professional fees and insurance, accounting fees and professional development, as well as salaries, WCB premiums and employer contributions to CPP and EI.
The value of legal services is measured by consumers in part by the outcome (whether the result is satisfactory), and in part by the education, training and experience of the service providers. In the Fraser Valley, lawyers’ fees range from $150 – $200 per hour for beginners to $300 – $450 per hour for senior counsel. In Vancouver, hourly rates may be higher because of higher overhead costs.
Revenue in a law practice comes from the payment of statements of accounts rendered after work has been performed and disbursements incurred. All overhead costs are paid from that revenue. In my experience, a full day of work may yield about 3 hours of billable time (except for court work which is more time-consuming). In a one lawyer firm (with a family lawyer and a legal assistant) with gross annual revenue of approximately $15,000 per month, about half of the gross revenue is used to pay salaries. That means that the lawyer will be paid about $4,500 per month, the assistant about $3,000.
Many clients struggle to pay the lawyer’s hourly rate. Accordingly, many counsel will negotiate or discount their fees to ensure that the client receives good service at a reasonable price. Some lawyers will consider a flat fee or a sliding scale arrangement, or accept a payment plan over several months. If necessary, a lawyer’s account can be reviewed by a court. To avoid unreasonable expectations about the service provided and the related legal fees, talk to your lawyer to understand better what’s possible.
Lisa M. Dewar Family Law and Mediation
MILNE SELKIRK, Lawyers
Bldg #5, 21183 – 88th Avenue
Langley, BC V1M 2G5
Phone: 604-882-5015 Fax: 604-882-5025