The Problem with Legal Fees

Reading Time: 5 minutes

Let’s talk about legal fees—a topic you’ve probably had to discuss with clients, even though it’s outside your job description.

But, like everything in real estate, the more you understand the process, the more valuable you are to your clients.

Now, I spend a lot of time thinking about legal fees in real estate… probably too much time. And let me tell you—there’s a problem with how legal fees are presented in our industry.

How It Traditionally Works

For years, the standard practice was to quote a Legal Fee + Disbursements. Lawyers charge a flat fee for service and pass the costs of closing—like title searches, banking fees, and tax certificates—directly to the client.

From the lawyer’s perspective, this is the easiest system. The legal fee is fixed, disbursements are reimbursed, and accounting is straightforward.

But there’s a problem: people hate uncertainty.

Most homebuyers are already at the top of their budgets. They want price certainty, not surprises.

So, when a lawyer quotes $1,499 + Disbursements, it sounds reasonable—until the client gets the final invoice and sees that disbursements added another $600 or more.

Now they’re wondering why they weren’t told the full cost upfront.

Here’s a real breakdown of disbursements:
(from one of my recent purchase files)

• Transaction Software: $75.00
• Wire Transfer Fees: $30.00
• ID Verification Software: $12.50
• Title Search: $176.87
• Writ Search: $26.00
• Tax Certificate: $118.15
• Registration Fee (Transfer): $84.23
• Registration Fee (Mortgage): $84.23

Total Disbursements: $606.98

If I had quoted $1,499 + Disbursements, the final cost to the client would have been over $2,100.

The Shift to Transparency

To address this, I’ve switched to an all-inclusive pricing model. For the file above, my fee was $1,999 + HST—simple, transparent, and reflective of the actual cost.

Sure, I might collect a little less on some files and a little more on others, but it averages out. Clients get the transparency they want, and I’ve found it builds trust.

But the bigger issue? How legal fees are marketed.

The Marketing Dilemma

Try this, Google “real estate lawyer” in your city, and try and get an idea of approximately how much a lawyer charges for a purchase closing?

I just did. I've got $999, $799, and "from $390".

Now go read the fine print and asterisks...

Let me save you the trouble. In virtually all of these quotes, the client will pay the same—or more—once their "disbursements" are added.

These lowball quotes create confusion and erode trust. And they make it work by inflating disbursement costs.

So in practice... I quote $1999 and my competitor quotes $999 for the same file. To the untrained eye, it appears that I'm charging double. But more than likely, our total invoice will be the same.

Worse, many of these firms operate on high volume, with minimal lawyer involvement. Good luck getting someone on the phone when something goes wrong.

Final Thoughts

This isn’t a rant about the price of legal fees—that’s for the market to decide based on the value we provide. It’s about transparency and the challenge of educating a market that often focuses solely on cost.

I’m not the cheapest closing lawyer, and that’s intentional. We dedicate significant time to each client, addressing their concerns, resolving issues, and ensuring we’re always accessible. Our focus is on delivering a premium service where clients feel truly represented—and that level of care comes with a cost.

Still, the responsibility falls on me to educate my market. I could easily revert to a Legal Fee + Disbursement model, but I believe in pushing for the model I stand behind: transparent, all-inclusive pricing.

As Realtors, understanding how the real estate legal market works is key, because clients will inevitably turn to you with questions.

That said, I’m curious:
What’s your perspective on legal fees in real estate? What feedback do you hear from clients? Are there better ways to approach this from your point of view?

I’d love to hear your thoughts.