Learn more about the different methods of charging lawyer fees in Ontario, along with the LSO rules that come along with the bill
When it comes to lawyer fees in Ontario, one size rarely fits for all matters. An urgent injunction, a routine will, or a personal injury claim each call for a different billing plan.
This article walks you through the different billing options for Ontario lawyers, so that you can pick the right fit for the file you’re working on!
Before we discuss the different options on lawyer fees that you can consider, let’s first look at the different rules of the Law Society of Ontario (LSO) on lawyer fees.
Under the LSO’s Rules of Professional Conduct (Rules), the most basic rule is that lawyer fees must be:
What constitutes fair and reasonable will depend on the circumstances. At most, the Rules provided some factors that you can consider in computing a fair and reasonable fee for your client:
This means that the final bill you’re charging for the client is up to your good judgment.
Although made in the perspective of a client, this video sums up some of these billing methods, and shows which method is appropriate for a particular case:
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The Rules also expect you to give your clients as much information as is reasonable and practical about the fees, disbursements, and interest. This must be done either before or within a reasonable time after the retainer starts.
That includes explaining the following:
Fee terms and billing policies must also be confirmed in writing, such as through a signed retainer agreement, engagement letter, or confirming email.
Related to the rules on disclosure is the requirement to fully disclose all financial dealings with your clients and the prohibition of accepting hidden fees:
When billing your client, the Statement of Account (SOA) must show what are charged as fees and as disbursements. This supports transparency and makes it easier for a client to see how you arrived at the total amount.
This also goes back to the requirement of informing your clients at the earliest possible opportunity regarding these fees and disbursements.
Generally, you cannot charge the client any lawyer fee when you provide legal services through a civil society organization, directly or indirectly, and whatever fee model it is.
Disbursements are exempted from this rule, but given that:
The Rules are explicit when it comes to joint retainers and fee sharing:
However, splitting of referral fees with non-lawyers may be allowed in the following instances:
The following are the other rules when it comes to referral fees:
There are rules that apply to the funds that you hold in trust for your clients, or funds that are within your control:
Here are some of the common billing methods in Ontario (and throughout in Canada):
We will discuss these billing methods for lawyer fees below, including some of the important rules that the LSO imposes on each method.
Hourly rates or charge-out rates remain one of the most common ways for lawyers to charge fees in private practice. Under this method, the client pays the actual time you or your legal team spends, which is usually recorded in small time units (e.g., in six-minute or fifteen-minute intervals).
Here are some things to keep in mind when charging lawyer’s fees through an hourly rate:
After computing your client’s bill, you must still review the total fee against the listed factors on what is a fair and reasonable fee. This prevents the mechanical “hours times rate” way of computing hourly rates, which may be unfair for your client. This way, hourly rates become a structured and transparent option within a broader menu of fee arrangements.
Fixed or flat fees, along with contingency fees, are one of the alternative fee arrangements that are still widely used in Ontario.
In a fixed or flat fee, you charge a set amount regardless of the time you spend on the matter. This is why it is usually the comparable method of charging lawyer fees to hourly billings.
Staged fees use a similar idea with fixed or flat fees, but break the matter into steps, with a fee set for each stage based on an estimate of the work involved.
Flat or fixed fees are suited to the work that is more predictable—or fixed—such as a standard transaction or a routine document package. This method can also give your clients a certainty of what they’re paying for.
However, the downside is that it may not be appropriate for complex litigation, where fixing a fee at the start of the engagement would be unjust for you.
As governed by the Solicitors Act and the Rules, contingency fee agreements (CFA) are another way to collect lawyer fees, where you will only be paid if you succeed in the case. Here, your fees will be collected out of the client’s recovery, e.g., from a settlement or an award.
CFAs are tightly controlled by the Rules and the law:
Watch this video to get some tips on how you can improve your law firm’s profitability:
Head over to our Professional Regulation page if you’re interested in learning more about the recent rulings and rules that govern Ontario’s lawyers.
Retainer fees are an advance payment or deposit held in trust for your client’s future legal work. In this billing method, your client pays money up front, and you hold it to cover accounts that will come as the file moves along.
Each time you issue an account, the fee and disbursements are drawn from the retainer balance, instead of asking the client to pay each bill separately.
A good retainer practice depends on a clearly written retainer agreement or letter:
The LSO’s Rules on trust and appropriation also apply to retainer fees:
You must obtain a money retainer at the start of the engagement and ask that the retainer be replenished as interim accounts are sent. This helps with your cash flow and reduces your collection risk.
A client who expects regular legal needs over a year, or who uses the same trusted lawyer for many transactions, often prefers this kind of standing retainer. It gives some predictability about the overall fee, while you gain some security that your work will be paid as it is done.
The downside of this arrangement is that you may not have full control if you want to withdraw or if a client stops renewing a retainer.
Ontario’s lawyer fee rules shape every choice that you make about how to bill a file and how to talk about money with clients. When in doubt, the test stays the same:
fees must be fair, reasonable, and explained in plain language.
Compliance with these rules, along with choosing the right fee model, builds trust that lasts beyond a single bill.
Check out our Events page for a list of conferences and awards nights for lawyers in Canada, which includes topics to improve your practice, such as discussions on lawyer fees, and more.
