How much does a family lawyer cost? Understanding legal fees and keeping control of costs

For many people considering family law advice, one of the first questions is also one of the most difficult to answer: how much is this going to cost?

It is a reasonable question. Legal costs can be significant, and you should have meaningful information about the likely financial commitment before deciding how to proceed.

The difficulty is that a family law matter does not usually have one predetermined pathway or one predetermined price. A matter that resolves after early advice and negotiation may require a very different amount of legal work from one that progresses to mediation, interim court proceedings, expert evidence or a final hearing.

Two terms worth understanding first

Before looking at the disclosure rules, it helps to understand two expressions that commonly appear in costs documents.

What are “total legal costs”?

Total legal costs means the estimated total cost of the legal services the law practice has been retained to provide under the agreed scope of work. It is not simply the amount of the next invoice or the cost of the next task.

If additional work outside that scope later becomes necessary - for example, mediation or court proceedings - the scope and costs disclosure should be reviewed and, where appropriate, updated before that additional work is undertaken.

A lawyer may also give you information about the possible cost of later stages so that you understand the broader financial risks of the matter. Those indicative future costs should be distinguished from the work you are presently authorising.

What is a disbursement?

A disbursement or outlay is generally an amount paid or payable to another person or organisation on a client’s behalf in progressing the matter. Examples can include court filing fees, process-server fees, searches, valuation fees, expert-report fees and other external expenses.

These amounts are different from the law practice’s ordinary business overheads. Barristers’ fees are also commonly invoiced to the client through the solicitor as an external cost or disbursement. However, where a solicitor retains a barrister or another law practice on the client’s behalf, specific additional costs-disclosure obligations also apply.

Family law is federal - so why do Queensland costs rules apply?

Most family law issues discussed in this article - including divorce, parenting and property matters - arise under Commonwealth legislation and, where proceedings are required, are generally dealt with in the Federal Circuit and Family Court of Australia.

The professional regulation of lawyers is different. A solicitor practising in Queensland is also subject to Queensland’s legal-profession framework, including the Legal Profession Act 2007 (Qld), applicable professional conduct rules and the regulation of matters such as costs disclosure, costs agreements and billing.

Accordingly, a Queensland family lawyer may be applying federal family law to the substantive dispute while the solicitor-client costs relationship is regulated under Queensland law. Once a matter is in the Federal Circuit and Family Court of Australia, the Court’s own costs rules also add further obligations.

What does Queensland law require lawyers to tell clients about costs?

Queensland law sets different disclosure requirements depending on the likely amount of professional legal costs, measured excluding disbursements and exclusive of GST.

• If those costs are not likely to exceed $1,500, statutory costs disclosure is generally not required, subject to the particular circumstances and exceptions in the legislation.
• If those costs are likely to exceed $1,500 but are not likely to exceed $3,000, an abbreviated form of disclosure may be used.
• If those costs are likely to exceed $3,000, detailed costs disclosure is required.

For abbreviated disclosure, the law practice must provide information including the general nature of the legal services, the basis on which costs will be calculated, an estimate of total legal costs and an estimate of total disbursements.

Where detailed disclosure applies, the law practice must provide an estimate of total legal costs if that is reasonably practicable. If a single estimate is not reasonably practicable, it must instead provide a range of estimates and explain the major variables that may affect the calculation.

Detailed disclosure also addresses matters such as billing intervals, the client’s rights concerning bills and costs disputes, who to contact about costs and additional information where the matter is litigious.

Written disclosure must be expressed in clear, plain language and is generally required before, or as soon as practicable after, the law practice is retained.

The scope of work matters

A costs agreement may define the work that the law practice is presently being retained to undertake. The estimate of total legal costs relates to that agreed scope of work.

For example, a client may initially retain a lawyer to advise, obtain disclosure, correspond and negotiate. Mediation or court proceedings may be reasonably foreseeable possibilities, but they do not necessarily form part of the work the client has presently authorised.

If the matter later needs to move beyond the existing scope, the retainer and costs information should be revisited so that the client understands the additional work and its likely cost before deciding whether to proceed.

Think about family law costs in stages

Early advice, information gathering and negotiation

This may include taking detailed instructions, reviewing documents, identifying relevant legal and practical issues, providing advice, obtaining or exchanging disclosure, preparing proposals and negotiating with the other party. Some matters resolve during this stage.

Mediation or other structured dispute resolution

If ordinary negotiations do not resolve the issues, mediation, family dispute resolution or another structured settlement process may be appropriate. This usually involves additional preparation, advice, negotiation and attendance.

A matter may resolve completely at mediation, or the process may narrow the issues that remain.

Court proceedings

Proceedings may become necessary where agreement cannot be reached, urgent intervention is required or an issue cannot reasonably be resolved without judicial determination.

Court proceedings themselves involve stages. Starting proceedings does not mean that the matter will necessarily proceed to a final hearing.

Why apparently similar matters can cost very different amounts

Two family law matters may look similar from the outside but require very different amounts of work. Costs may be affected by factors such as:

• the number and complexity of the issues;
• the amount and quality of financial disclosure;
• whether important documents are organised and readily available;
• whether the factual history is substantially agreed or heavily contested;
• urgency and the volume of communications;
• whether valuations, expert evidence or specialist advice are required;
• business, trust, company or third-party interests;
• the approach taken by the other party or their lawyer;
• whether negotiations or mediation are productive; and
• whether proceedings become necessary and how far they progress.

An estimate is therefore based on what is reasonably known and anticipated when it is given. It is not a quotation or a guarantee that the matter will follow one particular course.

Costs estimates should be updated when the matter changes

Costs disclosure is not a once-only exercise. Under section 315 of the Legal Profession Act 2007 (Qld), if something previously disclosed changes substantially, the law practice must disclose that change in writing as soon as reasonably practicable after becoming aware of it.

That may become relevant if, for example, negotiations become protracted, a valuation becomes necessary, an urgent issue arises, mediation becomes appropriate, proceedings become reasonably likely or the anticipated scope of an existing proceeding changes materially.

Queensland Law Society guidance recommends reviewing the file and costs position at meaningful milestones, when facts or instructions change substantially and when invoices are rendered. Importantly, merely sending invoices that exceed an earlier estimate does not itself satisfy the obligation to update anticipated future costs.

What can a client influence?

Not every component of legal cost is within a client’s control. You cannot control whether another party delays disclosure, changes position, raises new allegations, refuses a reasonable proposal or requires an issue to be determined by a court.

You can, however, materially influence the efficiency of your own matter. Useful steps can include:

• providing complete and organised instructions;
• identifying important dates early and preparing a chronology where useful;
• organising relevant documents rather than providing large volumes of unstructured material;
• identifying your priorities and distinguishing important issues from peripheral disagreements;
• responding promptly when instructions or documents are required;
• consolidating non-urgent communications where appropriate;
• carefully considering settlement proposals and preparing thoroughly for mediation; and
• discussing the likely benefit and cost before pursuing a significant new step.

The objective is not simply to minimise every item of legal work. Sometimes careful work at an earlier stage can avoid substantially greater costs later. A better question is whether the work is necessary, proportionate and directed toward a clear objective.

Proportionality matters in family law proceedings

Once a family law matter is before the Federal Circuit and Family Court of Australia, proportionality is not merely a matter of good practice.

Rule 12.08 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 provides that legal costs in a proceeding must be fairly, reasonably and proportionately incurred and fair, reasonable and proportionate in amount.

Relevant considerations include whether reasonable efforts have been made to resolve or narrow the dispute, whether unnecessary applications or documents have been avoided, the complexity and urgency of the work, the time involved and the quality of the work performed.

That does not mean the cheapest option is always the best option. It means the work undertaken should bear a sensible relationship to the issues, risks and objectives of the matter.

The other party can affect your costs

One of the realities of family law is that your costs are not determined solely by your own actions.

A cooperative exchange of information is usually cheaper than repeated requests for incomplete disclosure. Focused negotiations are generally cheaper than prolonged correspondence over peripheral issues. A mediation where both parties arrive prepared and informed can have a markedly different costs and success profile from one where important information is still missing.

Difficult or unreasonable conduct should not simply be accepted to save money. However, the behaviour of the other party is one of the variables that may make an initial estimate change.

What about barristers, experts and other external costs?

Your solicitor’s professional fees may be only one component of the overall cost of resolving a family law matter.

Depending on the circumstances, other costs may include court filing fees, barristers, mediators, valuers, accountants or forensic accountants, expert witnesses, family reports and the cost of obtaining records or documents.

Where a solicitor retains another law practice on the client’s behalf - commonly a barrister - Queensland law imposes additional disclosure obligations concerning that retained practice’s costs.

Before incurring a significant external expense, it is reasonable to understand why it is needed, what it is expected to cost, what role it will play and whether there is a reasonable alternative.

What changes if the matter becomes litigious?

Under the Queensland costs legislation, a “litigious matter” includes a matter that involves, or is likely to involve, court or tribunal proceedings. A matter can therefore become litigious before proceedings are actually filed if proceedings are reasonably likely.

Where detailed disclosure applies to a litigious matter, the law practice must also estimate the range of costs that may be recovered if the client is successful and the range the client may be ordered to pay if unsuccessful.

The disclosure must also warn that even a costs order in the client’s favour will not necessarily cover all of the client’s own legal costs.

Will the other party have to pay your legal costs?

Usually, each party to family law proceedings bears their own legal costs.

The Court can, however, order one party to pay some or all of another party’s costs where the circumstances justify doing so. In deciding whether to make such an order, the Court must consider a range of matters including the parties’ financial circumstances, any legal-aid assistance, the parties’ conduct during the proceedings, failure to comply with previous orders, the degree of success in the proceedings and written offers to settle.

A costs order is therefore not simply a mechanism for correcting a difference in wealth between the parties. The Court considers the circumstances of the litigation as a whole.

If a costs order is made, it also does not ordinarily mean that the successful party receives back everything they have paid their own lawyers.

Unless the Court specifies another basis, costs are assessed on a party-and-party basis. Those costs are calculated according to the applicable court rules and scales and may be substantially less than the solicitor-client costs actually incurred.

In appropriate cases, the Court can instead award costs on an indemnity basis. Indemnity costs provide a substantially broader basis of recovery and are generally reserved for exceptional circumstances, including particular litigation conduct.

Even an indemnity costs order does not guarantee reimbursement of every dollar of the successful party’s legal bill. The costs must still have been reasonably incurred and be reasonable in amount.

Can the other party be required to help fund your legal costs while the case is continuing?

Potentially, yes. This is different from a costs order made because one party has succeeded in a proceeding or because of the way litigation has been conducted.

A litigation-funding order is an interim measure intended, in an appropriate case, to enable a party to obtain or continue legal representation while the proceedings are still underway.

These applications arise most commonly in financial or property proceedings where there is a significant disparity in the parties’ access to assets or financial resources - for example, where substantial assets exist but one party controls the available funds and the other cannot reasonably fund their representation.

There is more than one possible legal mechanism. The Court may, in an appropriate case, make an interlocutory costs order requiring one party to provide funds towards the other’s legal expenses.

Alternatively, in a property proceeding, the Court may make an interim or partial property order which releases part of the property to a party before the final property settlement and allows those funds to be used for legal expenses.

Those types of order are legally different. An interim property distribution forms part of the Court’s exercise of its property powers and its effect must be considered when the parties’ property interests are finally determined. An interlocutory costs order is made under the Court’s costs power and is not necessarily an advance against the receiving party’s eventual property entitlement.

In either case, a disparity in resources does not create an automatic entitlement to litigation funding. The Court will consider the circumstances of the particular matter, including the parties’ financial positions, access to other funding, the amount sought, the substantive case, proportionality and the effect of the proposed order.

What if you cannot presently afford to fund the matter?

Depending on the circumstances, possible options may include available savings or assets, assistance or loans from family members, ordinary lending, an agreed payment arrangement with the law practice, specialist family-law litigation finance, an agreement between the parties for funds to be released from an asset or sale proceeds, or an application for an appropriate interim court order.

Legal Aid may also be available for some matters where the relevant eligibility and merits requirements are met.

Commercial litigation funding or specialist lending can sometimes address a cash-flow problem by advancing funds against an anticipated property settlement. It is still borrowing.

Interest, fees, security arrangements and repayment terms can materially reduce the client’s eventual net position, particularly if the matter continues for a long time. Those arrangements should therefore be assessed as part of the overall economics of the case, not merely as a way of postponing payment.

Commercial third-party funding is also different from a solicitor acting on a “no win, no fee” basis. Queensland law does not permit a conditional costs agreement for a matter involving proceedings under the Family Law Act 1975.

Court proceedings involve additional costs information

The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 impose additional costs-information obligations once proceedings are underway.

Generally, before each court event, a lawyer must provide the client with written information about actual costs incurred to date, estimated future costs through future court events and relevant expert expenses. The notice is also generally filed and served.

In a financial or property proceeding, if an offer to settle is made, the lawyer must also tell the client the actual costs incurred to date and estimated future costs to finalise the proceeding so the client can assess the financial effect of accepting or rejecting the proposal.

Queensland law also imposes a separate disclosure obligation before a negotiated settlement of a litigious matter is executed. The law practice must provide a reasonable estimate of the legal costs payable by the client if the matter settles, including any other party’s costs the client is to pay, together with a reasonable estimate of any likely contribution from another party.

Is the cheapest hourly rate the cheapest lawyer?

Not necessarily. Hourly rates matter, but they do not tell you the total cost of resolving a matter.

A lower hourly rate may not produce a lower overall cost if substantially more time is required to understand the issues, prepare advice, conduct negotiations or progress the matter. Equally, a higher hourly rate does not automatically mean better value.

More useful questions include:

• Is there a clear strategy?
• Is the work being performed efficiently?
• Are important issues being distinguished from peripheral ones?
• Are reasonable alternatives to litigation being considered?
• Is each major step directed toward an identifiable purpose?
• Are costs estimates being reviewed as circumstances change?
• Are you receiving enough information to make informed decisions about what happens next?

Questions worth asking before engaging a family lawyer

• How will my legal fees be calculated?
• What is the present estimate or range for the work to be undertaken?
• What assumptions underpin that estimate?
• What work is included in the stage we are starting now?
• What might cause the estimate to change?
• What would need to happen before we move to mediation or court?
• What external costs might arise?
• How will barrister or expert costs be disclosed?
• How often will I receive bills, and when will the estimate be reviewed?
• Will the likely cost and benefit be discussed before a major new step is taken?
• What can I do to help keep the matter efficient?
• If I have assets but limited cash flow, what funding options are realistically available?

The answers should give you more than a number. They should give you a clearer understanding of the process you are agreeing to fund and the choices that may affect what happens next.

Keeping control of the next decision

Family law matters sometimes develop in ways that cannot reasonably be predicted at the beginning. That does not mean legal costs should feel mysterious or uncontrolled.

At any meaningful stage of a matter, you should ordinarily be able to understand where the matter is now, what work is being undertaken, what that work is intended to achieve, what the present costs estimate or range is for the work within the current scope, what the likely next step may be and what could cause the strategy or estimate to change.

A good costs process should support informed decision-making rather than simply satisfy a disclosure requirement.