Understand How China Lawyer Charges
- Guide to China Legal Services and Billing Rates
The practice of law is a business, therefore you should have a good understanding of financial implications of hiring a China lawyer to represent you.
Various fee arrangements can be adopted by a Chinese lawyer, depending on the type of your case. Let's start with the most common fee arrangements, and the corresponding types of cases.
Charge by Hourly Rate
It's the most common payment arrangement in the west, but it's also gradually adopted by Chinese lawyers. The lawyer is paid for all time spent on the client's case based on an agreed rate, until the case has been solved. As can be expected, a more senior and high-profile lawyer will charge more, but seeking a cheap and less experienced lawyer will only take up more billable hours just to come up to speed with your legal issues. So the next question is: "What hourly rate I should expect?" The answer is: many factors, the primary factors that impact the lawyer's fees include: geographic location, degree of difficulty of the case (such as: documents to review, witness to depose, procedural obstacles to jump through), experience and reputation of the lawyer, other overhead costs associated with the law firm. In China, the hourly rate can vary anywhere from $100 per hour to $500 or more, for high profile firms in major metropolitan areas. The hourly fee arrangement is applicable to almost all kinds of cases.
Charge by Flat Fee
For legal cases where the process is transactional or somehow standard, such as: company formation, lease preparation, property transfer, trademark registration and estate planning, many lawyer are willing to offer competitive flat fees.
Charge by Retainer Fee
A retainer agreement requires the client to make payment in advance for potential legal services. It is mostly carried out in the form of a fixed fee charged periodically. For example, a company may pay a monthly retainer fee to a lawyer to attend board meetings and to provide consultancy on day-to-day legal dealings that come up. However, in case of criminal defense, a retainer fee can also take the form of a flat fee to represent a client on a specific matter, irrespective of time or effort involved. In addition, a client can choose to pay retainer fee in advance against future fees and costs, but the money is not refundable even if the money is not used.
The retainer fee is typically kept in a trust account, in which the money is deducted for the cost of services as they arise over time.
The contingency fee is the trickiest one. In this arrangement, the lawyer only get paid for legal services if the client receives a positive financial outcome, via settlement or money judgment awarded by the court. If you choose to engage a contingency agreement, it is important to first specify how the costs will be dealt with at what time. Next, you have to be aware that the fee is not always calculated as a percentage of the recovery. For example, if the case goes to trial, the percentage might slide higher (from a standard 33% to 40%+).