How Lawyers Charge

There can be large differences between law firms and what and how they charge for family law cases.  At Gordon Lawyers, we are re-writing the book on legal fees and do not charge many typical costs. On this page where there is this symbol  Gordon Lawyers do not follow the usual practice.  See HERE for more on what Gordon Lawyers do and do not charge.

Fair and Reasonable

The charges by a solicitor need to be “fair and reasonable”. But what is fair and reasonable is not defined by the rules governing lawyers.

Types of Legal Costs

There are a number of types of legal costs….

Time of your Solicitor – this is the cost of the time spent by your lawyer on your matter.  Usually this will form most of the legal bill

Lawyers charge for things like;

• Appointments with client's
• Telephone calls
• Letters and emails (sending and receiving)
• Reviewing and preparing documents
• Appearing in Court

Time of other legal staff – some (most) law firms also charge for the time spent by other staff in their office. How much and what is charged varies considerably between legal firms. Some legal firms charge for most time spent by support staff.

  Gordon Lawyers do not charge for secretarial or administrative staff time. Gordon Lawyers do charge for genuine para-legal work, but at a greatly reduced rate.

Disbursements – these are charges made by third parties who are called on to assist in the case. Common examples are, valuation fees or title search fees. If there is Court action, there may be city agent’s and barrister’s fees. The client’s approval should be sought before a large cost is incurred.

Office Costs of Legal Firm – costs such as photocopying, sending or receiving faxes, printing, mail, telephone charges are some examples.  Solicitors vary widely in how these are charged. Such costs can add considerably to a bill.

Some law firms charge a set percentage for “administration” costs.

Gordon Lawyers do not charge office or administration costs.

Court Fees – these are charges by the Family Court, such as a filing fee. They are listed on the Court's website. Some clients may be exempt from these fees. These fees are a small part of a client’s legal bill.

GST – GST will be added to lawyers’ fees.  Some disbursements are GST free, such as Court fees.

The Hourly Rate

Most lawyers charge based on an hourly rate.  Solicitors vary considerably in the hourly rate they charge.
Usually the more experienced solicitor in the same law firm will charge more than a junior solicitor, eg a partner will charge more than an associate, even if it is for the same work.

     At Gordon Lawyers the hourly rates varies with the the importance of the work.  So more routine tasks are charged at a lesser rate even if done by a senior solicitor.

The 6 minute Unit

Most lawyers divide their hourly rate into what is called 6 minute units. For example if a lawyer’s hourly rate is $300 per hour, one 6 minute unit is a $30 charge

     While still largely used at Gordon Lawyers, some tasks are charged at a flat rate.

The problem with 6 minute Units…

If a solicitor spends 5 minutes on a case they will charge one unit which might be $30, if they spend 10 minutes on a case they will charge 2 units (ie 12 minutes) which would be $60. Put another way, the time spent is rounded up to the next unit.

The hourly rate and 6 minute unit is often criticised, not only for the practice of “rounding -up”, but also, it does not encourage efficiency nor take into account the value to the client of the work done, only the time spent. A solicitor will charge more if they spend more time on a case, rather than billing the client for the value or importance of the task to their case.

     Gordon Lawyers round down to the nearest unit (minimum 1 unit). We know of no other law firm that does this. Gordon Lawyers is also moving away from the 6 minute unit, gradually introducing more fixed fees that give greater transparency and certainty in the charges.

Estimate of Fees - most important

Knowing a solicitor’s hourly rate is a poor guide to how much a case will cost.

Every solicitor needs to give their client an estimate of the likely fees and update these estimate as the matter progresses.

If an experienced lawyer is used, this estimate is a better guide of what it will cost than just looking at the hourly rate.

But it is an estimate and is not a fixed quote, so the charges can be more or less. But if it’s significantly more, then you can ask why.

What work is charged – caution needed

Many things happen in a lawyer’s office from reception to Court room. Some law firms, break-up every step needed in a task and charge for each part. This can significantly increase a legal bill.

This can result in two lawyers with the same hourly rate billing their clients vastly different amounts.

See HERE on how this can impact on a legal bill.

    Gordon Lawyers do not do this. Gordon Lawyers charge for the legal task done, not the steps along the way or who may have been invoved.

Alternatives to the Hourly rate

There are alternatives to the hourly rate such as fixed or capped fees. Not many lawyers offer these in the area of Family Law.

Fixed Fees – very few firms offer fixed fees in family law. A problem with fixed fees is that if the matter settles early the client still pays the entire fixed fee even though the work was not needed.

Fixed fees can apply in divorce applications.

Cost Agreements & Disclosure

Each client needs to be given a detailed Cost Agreement and Disclosure document. These documents set out the charges and other costs issues.

These can be complicated and if you are not sure what they mean then ask.

Family Law - Later in Life

Regardless of age, the family law principals are the same.  But for those who are older, some family law issues may be more relevant than others.

Long Relationship

If separation has occurred after a long relationship, then the family law principals push a property division towards a 50/50 split.  There needs to be a strong reason to vary much from the 50/50 (and sometimes there is).

Not the first Relationship

It is just as common for it not to be a first relationship, but a shorter subsequent relationship. In this case, what assets, debts and super each party had at the start of the relationship is very important. There is not the same push to a 50/50 split, as other family law factors have greater importance.

Children not an issue?

Often children are adult and the family law usually only deals with children under 18 years old.  Sometimes children become involved in their adult capacity. Sometimes (but not often) adult children can be a witness.

Superannuation

Superannuation is often a large factor has it has had time to accumulate during each parties' working life.  It can be the biggest asset at the time.

There is also a greater likelihood that the super maybe one of the older and less common types of defined benefits schemes. Theses are complicated schemes and they are not all the same. How they are treated by the family law is not straight forward.   Whether it is treated as an asset or income can have huge impact on the outcome. Great care is needed.

Health and Future Needs

A party's health is always relevant, but for those who are older the health issues can be more serious and because of this have a larger impact on the family law outcome.

Death & Family Law

While uncomfortable to think about, it needs to be considered if there is a chance that one of the parties may pass away. If either party dies then the family law rights of both parties is lost.  The surviving  party could get everything. The safety net is to start court proceedings, for once court action is started it can be continued by the estate of a party should they pass away.

Wills, Power of Attorneys and superannuation beneficiaries, should all be reviewed and updated if needed.

Financial Advice

Financial Advice is always a good idea, that is, advice about the best way to own and invest your assets and income. Lawyers are not qualified or allowed to give this advice. A suitable financial adviser is needed.

For those approaching or in retirement, this is an important issue because the family law settlement may need to set the party up for retirement.  Issues of Centrelink and other entitlements need to be considered. If advice is obtained early, then the family law settlement can be structured to maximise the opportunities.

Finding the Hidden Assets

The first step in any family law property division is working out what are the assets and liabilities. This may be as easy as making a list. But it can be difficult where one person largely controlled the finances during the relationship; where there are companies and trusts involved or where one person tries to hide assets.

In such cases digging is needed to find out what assets exist. Lawyers put on their private investigator hat as there are number of ways to find hidden assets.

Get and review all available documents

Starting point is to get all available financial documents. Documents needed vary from case to case, but the starting point includes bank statements, tax returns, wage slips etc

Sources of Information and documents

• Each party has a duty of disclosure under the Family Law act provide each other with all relevant financial information and documents.
• The accountant
• Past solicitors who may have had conduct of real estate or other transactions. Their file is not privileged.
• Bank statements for last 7 years can be obtained from banks and are often available through online banking portals at no cost.
• Australian Taxation Office will have all past tax returns and other information about tax payments
• Past and current loan and credit applications are a good source of information.
• Super funds
• ATO MyGov super search
• Lands Title searches of
• ASIC
• Will of any recently deceased close relative
• Facebook

What lawyers look for

When reviewing financial documents, what lawyers look for include;

• references to unusual transactions
• large transactions
• transfers to or from bank accounts that are not known
• bank accounts referred to in payslips tax returns that are not known
• super funds that are listed on payslips are not known.
• sources of income listed in tax returns,that you share dividends or interest on bank accounts.
• Tracing where  money came from and went to from real estate and other large purchases and sales.

Legal Tools

If court proceedings have been commenced the court system offers a number of additional tools.

• Court Orders for disclosure
• Subpoenas
• Discovery of documents
• Notice to Admit Facts

Dig Deeper

In most circumstances, if needed, forensic accountants are engaged to dig deeper into financial transactions.

Reversing Transactions

If it is found that a party sold,gave away or transferred a major asset which significantly impacts on the other parties family law entitlements, and the family Court has power to reverse that transaction.

Trusts

Putting assets and trusts will not protect the asset from a family law claim. In family law generally, it does not matter whose name and asset is in ( including a trust name), it is an asset associated with the parties it can be brought into account.

Golden Rule - trying to hide assets is usually pointless. It will also add considerably to legal costs and place the person trying to hide assets at the risk of a significant cost order against them.