Clients of city-based lawyers can expect to pay up to five times what people in country areas would pay for the same document, according to the results of a revealing survey of Australian lawyers.
The Survey of Fixed Price Legal Services 2019 was conducted by legal document startup Smarter Drafter in January and is the first national study of its kind to highlight differences in price for common legal services such as preparing a will or business sales agreement. Early results, shown exclusively to LSJ, reveal the average price of fixed-fee services can vary dramatically between city and country areas. The average price of preparing a sale of business agreement was $1,578 in rural areas and jumped to $7,045 when prepared by city-based firms. The average price in rural areas for a shareholders’ agreement was $1,567, but three CBD firms said they had charged up to $20,000 for the same service.
Smarter Drafter CEO Adam Long (pictured top left with his colleague David Lipworth) said such dramatic variations in price could potentially be explained by the fact city-based lawyers were often dealing with larger clients and big businesses. However, he noted that a larger client would not always add more complexity to a fixed-fee legal service.
“I was quite shocked that the fees for estate planning were so varied – because a person is a person, regardless of whether they have a property in Sydney or a property in Dubbo,” Long said.
The survey found that a simple will cost approximately $366 in rural areas, whereas city lawyers were charging an average $556 for similar documents.
“It’s not necessarily about complexity of a matter,” said Long. “Perhaps city lawyers who are dealing with larger or wealthier clients attach higher stakes to a matter. They price their services to reflect that investment and risk.”
The results of the survey may come as a shock to lawyers seeking to transition their billing arrangements from billable hours to fixed fees. But Long said this could be seen as a good thing: the survey would provide clarity for lawyers offering fixed-fee services, in a profession that has traditionally remained guarded on such issues.
“I’ve spoken to lawyers who swear until they are blue in the face that no one will ever pay more than $199 for a will,” said Long. “But I’ve spoken to others who won’t write a will for less than $1,000.
“We’re expecting participants will get new clarity – learning the median prices charged by firms like theirs will enable lawyers to know if they are overcharging or missing out on profit.”
Complete results of the survey will be available in March.