Best Practices for Lawyers in Fee Disputes with Clients

In this Blog article, Assessment Lawyer Karen Zvulony writes about the factors considered in an assessment of a lawyer’s fees under the Solicitors Act in Ontario as well as some practical tips and insights that can assist Lawyers when appearing at an assessment hearing, along with best practices to avoid an assessment hearing. 

Factors Considered in Assessing Lawyer’ Fees under the Solicitors Act in Ontario

Assessment officers base their decisions on evidence presented during the assessment hearing. The onus is always on the lawyer to prove the reasonableness of their fees. The factors generally considered by the Assessment Officer during the assessment hearing are (in no particular order): 

1. The time expended by the lawyer; 
2. Legal complexity of the matters dealt with;
3. The degree of responsibility assumed by the Lawyer;
4. The monetary value of the matters in issue;
5. The importance of the matters to the client;
6. The degree and skill and competence of the Lawyer;
7. The results achieved;
8. The ability of the client to pay; and
9. The Client’s expectation as to the amount of the fee. 

While no one factor should take priority over the others, the Client’s Expectations about Legal Fees, generally results in the greatest point of contention between lawyers and clients and is what often leads the client to dispute the lawyer’s fees. 

Clients do not like to be surprised with large billings, no matter how great the result the lawyer achieved was. This is why it is important for lawyers to provide regular legal billings and updates to clients so they are not surprised when they receive the lawyer’s bill. It is always good practice for lawyers to advise the client in writing about the estimated cost and associated risks/benefits before each major step in the litigation process. 

Providing clients with realistic fee estimates, including potential uncertainties, is crucial to help clients make informed decisions. If legal fees are likely to exceed the estimate, the lawyer should promptly notify the client in writing. Written evidence of estimates is crucial in cases of disputes regarding legal fees. Lawyers will have a greater chance of success at an assessment hearing by showing that the client made informed decisions throughout the retainer. 

In cases where the client lost or did not obtain favorable results, lawyers will benefit greatly at an assessment hearing if they can show that they provided written advice to the client regarding the potential for success or failure, including cost implications. 

To avoid misunderstandings and disputes, Lawyers should provide clients with clear engagement letters. These letters should outline communication channels, reporting requirements, and the basis for fees (hourly rates, fixed fee, or blended option). Changes in rates should be communicated in writing in advance

Effective communication, providing timely information, and maintaining written documentation are vital in managing client expectations and ensuring successful assessment outcomes for Lawyers. By adhering to these principles and providing competent services, Lawyers can build strong relationships with their clients and succeed in the assessment process.

If you are a lawyer and are involved in a fee dispute with your client, it is always advisable to try and resolve the fee dispute without resorting to an assessment. However, if an assessment is unavoidable, keep in mind these best practices.