The basic legal regulation regulating the remuneration of lawyers is Act no. 85/1996 Coll., on the Legal Profession, as amended, which in Section 22 paragraph 3 refers to the Ministry of Justice Decree no. 177/1996 Coll., on remuneration and compensation of lawyers for the provision of legal services (lawyers fee), as amended.
The lawyer’s fee states that a lawyer’s remuneration for providing legal services is governed by the contract with the client (so-called ‟contractual fee”). If there is no contract between lawyer and client, the lawyer’s remuneration will be decided using the provisions of the lawyer’s fee on a non-contractual fee (so-called ‟non-contractual fee”).
Highly prioritised by our law firm is the agreement on the contractual fee, which stipulates the amount for which the relevant legal service will be provided to the client, or the manner in which it is determined. The type and size of the fee is then always agreed with the client individually taking into account the anticipated material and temporal seriousness of the case. For clients who are interested in long-term collaboration we can also offer a fee at advantageous rates.
There may be several ways of determining the contractual fee, or types of fee for legal services. The following is a list of the main forms of these:
Time fee – hourly rate
The time fee is determined according to the time units and proceeds from the amount of time that the lawyer spends in providing legal services to the client, and is often determined by the so-called hourly rate. The total price for the legal service is calculated by multiplying the agreed hourly rate and number of hours spent by the lawyer in the provision of legal services to the client.
Provision of legal services fee
The fee is determined by the number of legal services specified in the lawyers fee (e.g. drafting a contract, participation at court hearings etc.). The total price for the legal service is calculated by multiplying the number of legal services provided and the fee rate, which can be contractual, or in the absence of an agreement with the client, non-contractual – determined by the lawyers fee.
A fee determined by a lump-sum amount means that the client at regular intervals, usually monthly or quarterly, pays an agreed amount in advance regardless of the requested amount of legal services in the relevant period.
Remuneration set at a fixed sum usually applies when settling a single case, such as the establishment of a corporation, but it also refers to the single provision of a legal service such as legal advice to a client.
Remuneration by share, so-called success fee
Remuneration stipulated as a share in the value of a case or in the outcome of a case (e.g. in the result of litigation). The amount of the lawyers fee agreed in this way is generally around 10-20% of the value of the case or the amount which is the subject of litigation.
Cash expenses and compensation for lost time
As well as a right to remuneration the lawyer is also entitled to compensation for expenses spent in the provision of a legal service (in particular in litigation and other fees, travel expenses, phone call charges, mail charges, expert opinion and specialist knowledge, photocopies, etc.) and to compensation for lost time in settling the act of legal service. Their amount is stipulated either by agreement with the client, in the absence of such an agreement by legislation (in particular by the lawyers fee), or by decision of a court or other government body.
Free legal advice
We would also like to inform our clients that persons who for financial reasons are unable to obtain legal aid from a lawyer can turn to the Czech Bar Association with a request that they be appointed a lawyer by this professional institution who would provide them with legal services free of charge or at a reduced fee.
Of the afore-mentioned types of remuneration our law firm usually prefers the contractual fee, which is stipulated by the hourly rate. In these cases the client is asked to pay a reasonable advance for legal services. This is an amount which is paid according to the number of hours worked.
Out-of-court settlement of disputes between a lawyer and his client (consumer) in cases when they fail to agree on a mutually acceptable compromise will be referred to the Czech Bar Association (Česká advokátní komora), with the registered office at Národní tř. 16, 110 00 Prague 1 (web page - www.cak.cz), (as an intermediary of negotiations between the lawyer and the client), that is competent to decide in accordance with Act No. 634/1992 Coll., on the consumer protection, as amended (the “Act”) and an authorization of the Ministry of Industry and Trade. Out-of-court settlement of consumer disputes with the Czech Bar Association is governed by the respective provisions of the Act and the Rules of Procedure of the Czech Bar Association for out-of-court settlement of consumer disputes.