Lawyer’s fees for legal services
The fundamental legal framework for setting lawyer’s fees is Act No. 85/1996 Coll., on the legal profession, referring in the provisions of Section 22(3) to Ministry of Justice Regulation No. 177/1996 Coll., on lawyers’ remuneration and reimbursement for legal services (the “Lawyer’s Tariff”).
The Lawyer’s Tariff distinguishes between extracontractual and contractual fees.
The amount of a extracontractual fee is set according to the tariff and is used in those cases where no fee is agreed between the lawyer and the client. The amount of a contractual fee is usually agreed as one or a combination of the following rates:
- Contractual hourly rate
The rate is set per case, especially taking into account the professional and time-consuming character of work, as well as the potential need to use a foreign language. The hourly rates usually range from CZK 1,500 to 3,000 per hour of legal services.
- Contractual share-based fee
A share-based fee is set as an amount corresponding to a percentage of a certain amount that represents the “subject of dispute” or the “subject of the legal service” (e.g., receivable amount, subject of fulfilment value, real estate value, etc.). The entitlement to a share-based fee may be conditioned fully or partially on success in case settlement or other result agreed in advance. As a rule, the share-based fee amounts up to 10% of the fulfilment value, with the highest permissible share-based fee being 20%.
- Contractual transaction-based fee
A transaction-based fee is agreed in relation to a legal service where legal acts are defined by the Lawyer’s Tariff and the fee always relates to individual legal service acts. The most frequent legal acts include (i) legal advice provision to a client; (ii) drawing up a legal deed (such as a contract); (iii) participation in legal proceedings; (iv) drawing up a submission in a case (e.g., an action); (v) negotiations with a counterparty; or (v) drawing up a legal analysis in a case. The Lawyer’s Tariff is the basis for setting the transaction-based fee.
- Contractual flat fee
Flat-rate representation can be agreed for long-term and regular work for a client, with the flat fee amount and other legal assistance conditions being set individually, depending especially on the extent, professional and time-consuming character of the legal services provided, and/or the need to use a foreign language.
The value-added tax (VAT) in the statutory amount is added to the fee.
In addition to a fee, the lawyer is entitled to reimbursement for any out-of-pocket expenses purposefully spent in connection with legal service provision and to a compensation for any idle time spent, the amount of which is set according to the Lawyer’s Tariff, unless agreed otherwise.