New Year, New Costs Agreement: What to Check Before You Sign

A new year often means new beginnings — and for many people, that includes starting a new legal matter. Before your lawyer gets to work, there’s one document that deserves your full attention: the costs agreement.

Too often, clients sign costs agreements quickly, assuming they’re standard or non-negotiable. But this document controls how much you pay, what you pay for, and how disputes are handled. Getting it wrong at the start can lead to unpleasant surprises later.

Here’s what to check before you sign — and how to protect yourself from overpaying.

1. Are the Hourly Rates Clearly Set Out?

A proper costs agreement should clearly state:

• Each lawyer’s hourly rate
• Different rates for partners, associates, and support staff
• Whether rates can increase — and when



Be cautious if the agreement allows the firm to increase rates without notice. You’re entitled to transparency from the outset.

2. How Is Time Billed?

Legal work is often billed in time units (commonly 6-minute blocks). Even short tasks can quickly add up.

Check whether the agreement explains:

• The minimum billing unit
• Whether emails and phone calls are charged
• If internal conferences are billable



If the agreement is vague, ask for clarification in writing.

3. Is There a Genuine Cost Estimate (or Just a Guess)?

Under the Legal Profession Uniform Law, lawyers must provide a reasonable estimate of total legal costs.

A good estimate should:

• Be explained in plain English
• Identify assumptions and risks
• Include a realistic cost range



If the agreement says the estimate is “indicative only” with no further detail, that’s a red flag.

4. What Disbursements Are You Agreeing to Pay?

Disbursements can significantly increase your final bill.

Before signing, check:

• Which disbursements are likely
• Whether admin costs (printing, scanning, postage) are charged
• If the firm adds a margin to third-party invoices



Disbursements should be transparent, reasonable, and clearly disclosed.

5. Are There Extra Fees or Uplifts?

Some agreements include:

• Uplift or success fees
• Cancellation or file-transfer fees
• “File management” or administration charges



These should never come as a surprise. If you don’t understand a fee, don’t sign until it’s explained.

6. How and When Will You Be Billed

Check:

• Billing frequency (monthly, milestone-based, or end of matter)
• Payment terms and interest on late payments
• What happens if you dispute an invoice



Regular billing gives you more control and allows you to catch issues early.

7. What Are Your Rights If Things Go Wrong?

Your costs agreement should not limit your legal rights.

Make sure it doesn’t:

• Prevent you from requesting an itemised bill
• Restrict your right to a costs assessment
• Force you into unfair dispute processes



You always have the right to question your bill.

Before You Sign: Get It Checked

A costs agreement is not just paperwork — it’s a financial contract. Spending a little time reviewing it now can save you significant money and stress later.

At Law in Check, we review costs agreements before legal work begins, helping clients avoid hidden fees, vague terms, and unfair billing structures.

Before you sign anything, make sure your costs agreement is working for you — not against you.