Legal fee quote with no fee surprises

What a legal services quotation should include

A legal fee quote tells a client what the matter will cost before you open the file: fixed fees for defined work, an hourly rate for anything open ended, and disbursements estimated on their own lines. The sample covers a lease review and a shareholder agreement for a small company. Load it in the free quote maker and adapt it to your matter, rates and engagement terms.

A legal services quotation should identify the client and the matter, describe the work each fee covers, state the fee basis, and separate disbursements from professional fees. Clients read legal quotes defensively, so the clearer the limits, the fewer write offs you make at billing time.

1. Client and matterThe legal entity you act for, not just the person who called, and a short matter description. On the sample that is Hidayah Trading Ltd, not its director.
2. Fee basis for each itemFixed fee, hourly rate or capped estimate, written beside each piece of work so the client knows which items can grow.
3. What a fixed fee coversThe documents, the number of drafts or rounds of comments, and the meetings included. A fixed fee shareholder agreement with no draft limit is an hourly matter in disguise.
4. Hourly rates and incrementsRates for each person who may work on the file and the time unit you record, such as six minute increments.
5. DisbursementsRegistry searches, filing fees, courier and certified copies listed as estimates and passed on at cost.
6. Assumptions and triggersEvents that take the matter outside the quote: the other side instructs a lawyer, a dispute starts, or new parties join the deal.
7. Funds on accountAny advance payment you require before starting, and how it is held and applied against your bills.
8. Validity and engagementHow long the quote stands, and a note that a separate engagement letter or retainer agreement will follow for signature.

Sample legal fee quote with example prices

Harbor Lane Legal quotes Hidayah Trading Ltd under two groups. Fixed fees cover the commercial lease review, the shareholder agreement and a one hour meeting to explain both documents. Disbursements hold a single estimated line for registry searches. The total before tax is $3,935, and a 50% payment is requested before work begins. The figures are examples to show the layout, not a guide to what lawyers charge.

Edit the Harbor Lane Legal quote

4 lines are filled in, from commercial lease review to registry searches. Put in your own legal services rates, then download the PDF.

Open the legal services sample

How to price legal work in a fee quote

Lawyers usually quote one of four ways: a fixed fee for defined transactional work, an hourly rate with an estimate, a capped fee, or stage based fees for matters that move in phases. A fixed fee is the easiest for business clients to approve, provided its boundaries are written down.

1. Fixed feeOne price for a defined output such as a lease review, a simple will or a company formation. Works when you have done the task often and know the usual hours.
2. Hourly with an estimateRate times hours, with a range for the whole matter. Suits disputes and negotiations where the other side controls the pace. Tell the client before the estimate is passed.
3. Capped feeHourly billing up to a stated maximum. The client gets certainty, and you bill less if the work runs short. Define the events that lift the cap.
4. Stage based feesA separate fixed fee or estimate for each stage, such as advice, drafting and negotiation, so the client can stop after any stage.

Rules on fee agreements, contingency fees and money held in advance differ between places and practice areas, so check what the body that regulates lawyers where you practice expects before you send the quote. For the general trade offs, see fixed price vs hourly billing.

Worked example: turning an hourly estimate into a fixed fee

A business client wants a demand letter and a short negotiation over an unpaid commercial invoice, and asks for a fixed price. Here is how the hours become a number. Rates are examples.

1. List the tasksReview the contract and emails, 2.5 hrs; draft the demand letter, 1.5 hrs; client call, 0.5 hrs; allowance for negotiating with the other side, 2 hrs. Total 6.5 hrs.
2. Price lawyer time6.5 hrs x $260 = $1,690.
3. Add support timeA paralegal builds the chronology and pulls documents: 1.5 hrs x $110 = $165. Professional fees now total $1,855.
4. Set the fixed feeRound to a fixed fee of $1,850 and state that it covers one demand letter, one round of correspondence and one call.
5. Add disbursementsCourier for the letter, estimated at $35 and billed at cost, sits on its own line outside the fixed fee.

The negotiation allowance carries the risk. If the other side brings in its own lawyer or starts proceedings, the quote should say the fixed fee ends there and hourly rates apply from that point.

Inclusions and exclusions for a fixed fee legal quote

Mistakes to avoid when quoting legal fees

• Offering a fixed fee with no limit on drafts, so a difficult counterparty can keep the matter open for months.
• Mixing disbursements into the professional fee, which inflates the fee and hides what is passed through at cost.
• Quoting to the individual when the client is the company, then chasing the wrong person for payment.
• Giving a single hourly estimate with no range and no promise to update it, then sending a bill twice as large.
• Forgetting the trigger events that end a fixed fee, such as the other side instructing a lawyer.
• Starting work before the client has signed the engagement terms and paid any funds on account.