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The cost of engaging a business lawyer in New Zealand is often very high – hourly rates vary between $200 – $600 per hour. The “billable hours” pricing model used by most professional services firms has earned a bad reputation, due to the perception that hourly rates are often a poor indicator of value. If you have ever outsourced any legal work to a law firm, you may relate to some of these common challenges:

  • you are not able to predict how much you will pay for your legal advice; 
  • it is not easy to shop around; 
  • lawyers have an incentive to take longer so that they can bill more hours; and 
  • you are always on guard when discussing things with your lawyer over the fear of increasing your bill.

However, not all business lawyers charge hourly rates in New Zealand. A few firms use fixed fees and retainers to bill their clients, although they remain uncommon in areas such as litigation or employment law. This article explains how business lawyers charge for their services in New Zealand, what you need to know as a client and how to dispute a legal bill.

How Do Business Lawyers Price Their Services? 

When engaging a business lawyer, your first point of contact is typically a solicitor. Solicitors operate within sole practices, private practices or regional firms. These businesses can range in size from small firms (up to five partners) to large firms (more than twenty partners). Typically, large firms provide more specialised services and therefore charge higher fees. 

How Much Does an Hourly-Rate Lawyer Cost?

Traditionally, law firms in New Zealand have charged for their services using an hourly rate pricing model. Under this model, you often pay a large bill (depending on the complexity of the work) without receiving a previous estimate of the cost. Your lawyer’s hourly rate can vary depending on their experience, speciality and the law firm’s overheads. On average, prices range from:

  • junior lawyer: $200 – $250 per hour
  • senior lawyer: $250 – $400 per hour
  • practice leader or partner: $400 – $600 per hour

How Much Does a Lawyer on Retainer Cost?

If you can provide a regular inflow of work throughout the year, a business lawyer at a law firm may agree to charge you a retainer fee. This pricing model is most common amongst large business clients because they can provide a high turnover of work. 

How Much Does a Fixed-Fee Lawyer Cost?

You may be able to pay a fixed fee for specific projects if they involve routine or repetitive work or if your lawyer can easily estimate the amount of work required, such as with property purchases. However, if you need litigation work, this is less likely.

Fixed fees are more beneficial for your business because you are aware of the full cost upfront when you engage the firm. This provides you with price certainty and transparency. There is a trend towards fixed-fees, although only a handful of lawyers currently offer this pricing model. 

Tip: If you use Google Search to shop around for legal services, try using terms like ‘fixed-fee business lawyer’ to find out if there are any lawyers around you that use this pricing model. 

How Much Does A Fixed-Fee Business Lawyer Cost?

The main benefit of a fixed-fee model is that it provides you with cost certainty and transparency for your legal fees. With a quote for a flat rate, you can easily compare the cost of different legal service providers. Here is a pricing guide for some of the most common fixed-fee matters.

Pricing guide for LegalVision LVConnect members

Type of Project

Cost

Drafting a Privacy Policy

$250 + GST

Incorporating a Company

$250 + GST

Registering a Trade Mark

$750 + GST

Drafting a Letter of Demand

$750 + GST

Reviewing a Commercial Lease

$1500 + GST

Drafting a Sales Terms and Conditions

$1500 + GST

Drafting a Shareholders Agreement

$2000 + GST

Can You Agree on the Cost with Your Lawyer Beforehand?

Your lawyer must inform you up front of the basis for charging and the process for payment. As a client, you also have consumer rights under New Zealand law. Your lawyer must:  

  • charge you a fair amount;
  • protect and promote your interests;
  • keep you informed; and 
  • treat you with respect. 

If you are unhappy with your lawyer’s service or bill, you can follow these steps to dispute them:

  • raise any issues with your lawyer in an attempt to resolve the matter between yourselves – your lawyer must deal with your complaint promptly and fairly; or
  • if you cannot solve the issue, you can complain about your lawyer to the Law Society. 

Tip: For example, you hire a business lawyer to help you review a commercial lease, but you do not receive any information beforehand about how much this service will cost you. When you get the bill, it has no breakdown of hours or tasks, and the total amount is quite large. You ask your lawyer to explain the charges, so he sends you a detailed invoice with hourly amounts and details of his work. Once you can see where the cost comes from, you are happy to pay.

Key Takeaways 

When you engage a business lawyer, you may be charged an hourly rate, fixed fee or retainer for their services, depending on the firm’s pricing model and the type of work. The fixed fee pricing model is often better for your business because it provides you with cost certainty and transparency for your legal fees, and allows you to shop around for a business lawyer easily. When you engage a law firm, it is essential to sign a costs agreement before your lawyer commences the work, especially if you are paying an hourly rate. Your costs agreement should provide you with an estimate of the fees and how your lawyer arrives at this estimate.

If you need help with a commercial legal issue, LegalVision’s fixed-fee business lawyers can help. Call 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

How much does a lawyer cost in New Zealand?

The cost of a lawyer will depend on what legal advice you need. Fixed-fees can vary from $250 upwards while hourly rates vary between $200 – $600 per hour.

How much should an initial consultation cost?

Some law firms offer an initial consultation to clients to give them a better idea of their legal options. Client-centric law firms such as LegalVision provide free consultations and free fixed-fee quotes.

Should I hire a business lawyer to start a business?

Starting a business can be extremely time-consuming. In most cases, hiring a lawyer and accountant adds a lot of value to your business’ early stages. This depends, of course, on the size and complexity of your business. A good business lawyer will provide vital assistance in almost every aspect of your business, from incorporating your company to registering a trademark or dealing with lawsuits and liability. You can deduct most legal expenses for tax purposes as long as they have a connection with your business activities as the taxpayer.

How do I hire a small business lawyer?

When engaging a business lawyer, your first point of contact is typically a solicitor. Solicitors operate within sole practices, private practices or regional firms. A fixed-fee business lawyer provides you with cost certainty and transparency for your legal fees, and allows you to shop around for legal services easily. You can conduct a search using terms like ‘fixed-fee business lawyer’ to find out if there are any lawyers around you that use this pricing model.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

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