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Legal fees > Why legal fees are high?

Why legal fees are high?

Fees.  The word that most terrifies anybody who sees an attorney.  There can be nothing that has done more damage to the image of lawyers - or strikes more fear into the pockets of customers! 

The reality is sadly for attorneys, very different!  Legal costs are so high precisely because the attorneys practice fees cost so much.  Firstly, you don't want to consult with an attorney in a run down, insecure part of town.  You expect your attorney to have nice offices, the image reflected on his letterheads, his business cards and throughout the practice must be professional, modern and smart.  Well, that's not all you are paying for - wait till you start with one of the most intensive labour businesses out - the receptionist, the secretaries, delivery services and staff, candidate attorneys, bookkeepers and auditors - and that's not even getting onto all the equipment, computers, photostat machines, the latest technology clients expect one to embrace and the fortune you spend on stationery and post.  It all adds up and before you try and work out what you think the attorney is earning, take 25% of his hourly rate and times that by the 5 or 6 hours of work he can actually charge for a day, in between the basic administrative time of running a business, and then start deducting tax!  Senior legal secretaries alone earn R15 000 to R20 000 a month - so do not underestimate the costs of running a legal business! 

Now that you have a basic idea of the public perception vs the attorneys complaints, lets get on to what you should expect, what is not acceptable - and what you can do when you feel you have been ripped off! 

Most attorneys charge fees on an hourly basis - because the one thing they have to sell is their time.  So, in most instances, you are going to be quoted an hourly rate.  There are exceptions and those would include transfer fees charge in relation to selling or buying a house by conveyancers or tasks relating to certain agreements or work where the amount of work involved is generally the same - for example, Ante nuptial Agreements, registering a Close Corporation etc.  If your transaction relates to the sale or purchase of a property your attorney will almost always charge according to guidelines laid out and which you can request to see.  Your chance of negotiating that is fairly slim - but you can always try!  Those sorts of charges are seldom disputed and for brevity not dealt with here.  I will focus on hourly charges as these are the most commonly the subject of dispute - and of concerns about what you may end up paying.

Of course, in fairness to an attorney, it is very difficult to estimate before any case what you may end up paying.  Take a divorce for example - an attorney can quickly tell you what he will charge you if your divorce is not opposed and the two of you come to an agreement quickly.  He can't possibly tell you what it will cost if you and your partner decide to try and take the matter to trial and then sit in court, day after day, disputing what you own and who earned it!  So, while some people have a perception that lawyers drag out cases to make money, many attorneys will tell you of clients who choose to argue and dispute the most minor things, for hours at length, on the basis that "its not a question of cost, it's the principle."  These clients are often the first to complain about a high bill when they get it!

When I was a candidate attorney my principal (the attorney in charge of training me) would often tell people involved in divorces, "Fees are high, so please don't ask me to write letters about pots and pans or the family pets - no matter how dear they are to you, unless you really do want to pay me for that."  And despite that, people really do spend time complaining to their attorneys that their partner has taken their favourite cup, or cooking set, and they want it back.  Of course some of these items can cost a fortune - but decide very clearly before any litigation matter as to what your goals are and what you are prepared or can afford to pay to achieve them.  It won't help you to pay an attorney for 5 hours of his time to ultimately resolve a matter about that cooking set if it is only worth R2000!  In short, people are by and large responsible for the high fess they run up if knowing their attorney is charging for all the work they give him or her, that they hand over responsibility for every minor issue.

Having said all of that, of course there are attorneys who over charge, who take advantage of clients for financial gain - because unfortunately, as law teaches us, most people do.  The advantage you have when dealing with an attorney is that you do have the chance to do something about it!  This is a registered professional who is bound by the Attorneys Act, the rules of his professional organization, his agreement with you and case law - and you can't say that about too many professions or people or companies who will be paid by you during your life.Attorneys fees are high - just as are the fees of most experts these days, but while some manage to hide them behind commissions and kick backs, attorneys generally refer straight to what sounds like an astronomical hourly rate.  The first thing that goes through one's mind is "How much is he earning?"  R1000 an hour times 40 hours a week times 4 weeks a month - and probably lying about the time too!