KEY NOTES
- The Administration Fee is calculated only on amounts that fall under the lawyer’s portion of the bill. Lawyers do not pay Administration Fees on non-taxable items.
- We are required to charge lawyers the appropriate jurisdictional sales tax on Administration Fees.
- The Administration Fee does not affect your total revenue, which is the revenue you recognize from Goodlawyer.
- You should treat the Administration Fee as a business expense for accounting purposes.
- All amounts and rates are broken down in a statement for each bill, which you can find in Transaction History and Tax Download.
How is the Administration Fee Calculated?
We calculate the Administration Fee based on your Gross Legal Total, which is the sum of the amounts that result in a lawyer’s gross revenue received from the Platform (i.e., Legal Fees + Legal Fee Taxes). Administration Fees for disbursements and non-taxable government fees are paid directly by the client.
Each time a client is invoiced, we multiply your Gross Legal Total by 3% to get the Administration Fee. The Administration Fee then has the appropriate sales tax applied and the Administration Fee + Administration Fee Tax is deducted from the Gross Legal Total and the remainder is the amount remitted as payment to you.
Here’s an example bill for an Ontario client and Ontario lawyer:
- Legal Fee: $1,000.00
- Legal Fee Tax (13% HST): $130.00
- Service Fee: $239.00
- Service Fee Tax (13% HST): $31.07
- Total amount processed and paid by client: $1,400.07
- Total amount remitted to lawyer: $1,091.69
🧮 Hey Goodlawyer, show your work
Total amount processed and paid by client: $1,000 + $130 + $239 + $31.07 = $1,400.07
[Legal Fee + Legal Fee Tax + Service Fee + Service Fee Tax = Total]
Gross Legal Total: $1,000 + $130 = $1,130
[Legal Fee + Legal Fee Tax = Gross Legal Total]
Administration Fee: $1,130 X 0.03 = $33.90
[Gross Legal Total X 0.03 = Administration Fee]
Administration Fee Tax: $33.90 X 0.13 = $4.41
[Administration Fee X tax rate = Administration Fee Tax]
Amount Remitted to Lawyer = $1,130 - $33.90 - $4.41 = $1,091.69
[Gross Legal Total - Administration Fee - Administration Fee Tax = Amount Remitted to Lawyer]