The cost of an employment lawyer depends on the type of matter and the experience of the lawyer. Minimal risk, commonplace matters like typical wrongful dismissals can be conducted via an accessible contingency fee arrangement, which means the client only pays a fee upon successful completion of the services and this is usually calculated as a percentage of the gain realized for the client. On the other hand, higher risk, more complicated matters which are appropriate for hourly fees such as defending against serious just cause allegations can be expensive if sophisticated counsel is needed and there could be a lengthy trial.
In any event, it is important to remember that speaking to a lawyer to understand your rights is never cost-prohibitive.
First Consultations
Most employment law firms that focus on employees (i.e., employee-side or plaintiff-side law firms) provide free consultations.
Some law firms do charge a small, fixed fee for a one-hour first consultation, and in that case, the consultation fee will depend on the hourly rate of the lawyer conducting the first consultation. However, it will usually be no more than $400.
At the end of a first consultation, if the lawyer suggests that he or would take the case, the lawyer will tell the client how long the matter will likely take, all about the risks involved, and the estimated costs. The lawyer will also tell the client what kind of cost structure is right.
There are three distinct kinds of cost structures for hiring an employment lawyer: (1) hourly rate, (2) contingency and (3) fixed fee.
Hourly Rate
In Canada, in our experience, the range of employment lawyers’ hourly rates is $300 to $1500 per hour. Junior lawyers who only recently started practicing the law are on the low end while long-standing lawyers with decades of experience and an earned reputation are on the high end.
In addition, the region of the lawyer also may decide how much an employment lawyer charges. Larger city lawyers usually charge more than smaller city lawyers. Even among the big cities, there is a disparity in costs. Toronto lawyers normally charge more than Ottawa lawyers, for example. All things being equal, a 10-year employment lawyer in downtown Toronto is typically going to cost about 25% more than an Ottawa lawyer with the exact same vintage.
It is not a good practice to hire a lawyer in a different city just to save money. If a lawyer has to travel to meet with you and attend hearings, they are usually going to charge for their travel time.
Furthermore, the size of a law firm can also shape how much an employment lawyer charges per hour. Larger law firm lawyers typically charge more per hour than solo or small firm lawyers.
Estimated Time of Employment Law Cases
If a client were to hire an employment lawyer for these various legal procedures, here is how many hours it could be estimated to take:
- Demand letter: 1-5 hours
- Review a contract: 1 hour to review it and write a short memo/or have a call and perhaps another 3 hours to help the client negotiate changes.
- Draft a contract: 1-5 hours
- Proceed on a wrongful dismissal matter past the demand letter but only up until the end of a mediation or settlement conference: 15-30 hours.
- Proceed all the way to a hearing (trial or motion), but not including the hearing: 15-50+ hours
- Proceed to summary judgment motion and conduct the summary judgement motion: 50-250+ hours.
- Proceed to trial and conduct the trial: 50-500+ hours.
- Appeals: 30-150+ hours.
*These are just estimates. No two cases are the same. Talk to a lawyer for a personalized estimate.
You can multiply these estimated hours by the above-referenced hourly fees to estimate how much a legal matter may take.
In case a client has an employment law matter with $35,000 or less in controversy and it could be tried in the Small Claims Court, then a paralegal could handle the matter for the client. Paralegals charge less than lawyers, typically in the $100-$250 per hour range. However, keep in mind that paralegals are prohibited from representing clients with matters that are appropriate for the superior courts.
Contingency Fee
A contingency fee means the client only pays legal fees if they receive money because the lawyer won the case or gets a negotiated settlement. If the client loses the case, they do not pay legal fees, although they will have to pay for legal expenses like disbursements.
In addition, the lawyer will charge HST.
With contingency, the client pays a percentage of how much extra the lawyer achieves for the client in settlement or judgment.
For example, in wrongful dismissal, if a client was offered a $50,000 severance package from their employer, and the lawyer negotiated or won $100,000 for the client, then the lawyer will get a percentage of that extra $50,000 he or she achieved for their client, plus expense and HST.
Contingency fees at employment law firms are around 20-33% plus expenses and HST.
The decision to offer a contingency fee is decided by the lawyer or paralegal taking on the case. Not every case is proper for contingency. Typically, a straightforward wrongful dismissal where generally the only issue is severance is appropriate for contingency. It is always risky for a lawyer to agree to work on a contingency in a complicated legal matter.
Contingency fees are not always ideal for the client either. If someone has a straightforward claim worth a lot of money, paying an hourly rate may have been a lot cheaper than contingency in the end. This isn’t to say contingency fees are always bad in this situation. Rather, some individuals cannot afford any hourly rates and the only way they can access justice is by contingency.
Know your rights: Read about contingency fee consumer rules in Ontario here.
Fixed Fee
Employment lawyers can also charge a block, fixed, or flat fee for performing a particular task(s), regardless of how much time is spent. A good example of this is when a lawyer drafts a document or reviews a document for someone or some organization.
For example, a lawyer could charge a start-up $500-$1000 for an employment contract or workplace policy.
Fixed fees are not normally proper in litigation because of the nature of the adversarial process.
Conclusion: The Cost of an Employment Lawyer
Employment lawyers charge nothing or a modest amount for a first consultation. After the consultation, depending on the nature of the legal issue, the cost of an employment lawyer can vary greatly.
Hiring a lawyer to review a contract could cost $500 while hiring a lawyer for a weeks-long trial about allegations of years-long sexual harassment could cost hundreds of thousands of dollars.
In any event, no one will have to prepay the total amount of a complete estimate for a complicated trial before the lawyer agrees to take a matter on. Clients can pay monthly or under long term arrangements if the lawyer agrees. What seems expensive at first may not be as expensive when you consider the matter could be broken up into monthly fees.
However, typically, a lot of employment law matters, particularly wrongful dismissal matters settle well before a trial. In a lot of cases, issues are settled in less than 25 hours after a demand letter is delivered and at or before a mediation or settlement conference. In these cases, it might not be unreasonable to estimate the matter to cost $7,000-$15,000 based on an average Canadian lawyer’s hourly fee.
Lawyers may also charge nothing until and unless the lawyer wins the case (not including expenses and HST). This is a contingency fee agreement.
Jeff is a lawyer in Toronto who works for a technology startup. Jeff is a frequent lecturer on employment law and is the author of an employment law textbook and various trade journal articles. Jeff is interested in Canadian business, technology and law, and this blog is his platform to share his views and tips in those areas.