Legal Invoice Template - Canada

Legal services in Canada are subject to either HST or GST/PST depending on your province. In harmonized provinces (Ontario, Nova Scotia, New Brunswick, Newfoundland & Labrador, Prince Edward Island), you charge 15% HST on professional fees and most disbursements. In non-harmonized provinces, you charge 5% federal GST plus provincial sales tax rates (ranging from 5% to 10%). Certain legal services may be exempt from tax; verify your specific situation with CRA. If your firm's annual revenue stays below $30,000, you may not need to register. Once you exceed this threshold, registration with the Canada Revenue Agency is required.

Billable time represents your professional services—consultations, research, drafting, court appearances—charged at your hourly rate multiplied by hours worked. Disbursements are third-party out-of-pocket costs your firm paid on the client's behalf, including court filing fees, title searches, expert witness fees, courier services, and photocopying. Time is based on your hourly rate; disbursements are reimbursed at cost (with potential firm markup if disclosed). Both should appear separately on your invoice so clients understand exactly what they're paying for. This distinction matters for accounting, budgeting, and client clarity.

Time entries should describe the specific work performed rather than vague summaries. Instead of 'legal research,' write 'Legal research on negligence liability in product defect cases.' Instead of 'communications,' specify 'Telephone consultation with client re: settlement offer—30 minutes.' Detailed descriptions demonstrate value to clients and protect your firm if billing disputes arise. They also help you analyze work patterns by task type, improve future estimating, and justify fees to the client. Group entries by service category (consultation, research, drafting, appearances) and include the date; this structure makes invoices easier to review and understand.

Most out-of-pocket expenses incurred for a client matter are subject to HST or GST. Court filing fees, search fees, courier costs, photocopying, and travel expenses are all taxable. However, if you're passing through a third-party invoice where tax was already charged (e.g., hiring a process server or paying expert witness fees), don't charge tax again on that invoice—check the original vendor invoice. If your firm adds a markup on disbursements to cover administration, apply HST to the markup amount itself. Always itemize disbursements separately and clearly identify which are pass-throughs versus firm-incurred expenses.

A retainer is an advance payment held in your firm's trust account to cover future fees and disbursements. Invoice the client upfront for the retainer amount, then deposit it into trust. As you complete work, issue regular invoices that draw against the retainer balance. Your invoice should show: retainer held, current fees and disbursements charged, applicable HST/GST, and the remaining retainer balance. If the retainer depletes, request replenishment before continuing work. At matter conclusion, account for any unused retainer and arrange return to the client. Proper retainer invoicing ensures transparency and maintains trust account compliance.

Matter numbers uniquely identify each client file or transaction within your practice. If you serve corporate clients with multiple matters, matter numbers separate billing and costs by project. They organize time entries, track profitability by matter type, and enable accurate trust account record-keeping. When invoicing, include the matter number prominently so clients can match charges to their specific legal matter. Your accounting system uses matter codes to segregate revenue, and your law society may require matter-level billing records for compliance audits. Consistent matter numbering prevents billing confusion and improves practice management efficiency.

Standard payment terms for legal invoices typically range from Net 15 to Net 30 days. Established corporate clients may receive Net 45; urgent matters sometimes warrant Net 10. Choose a standard term and apply it consistently across all invoices for predictability and cash flow planning. Some firms include language about late payment interest (typically 1–1.5% monthly on overdue balances), though check your provincial law society's ethical guidelines—some restrict or prohibit this practice. Clearly state your payment terms on every invoice and consider offering a small early payment discount to encourage faster cash collection if it aligns with your firm's financial needs.

Yes. Canadian law societies require you to charge reasonable fees, disclose rates in writing, maintain detailed time records, and issue accurate invoices describing work performed. You cannot bill for work not actually done, inflate time entries, or mischaracterize disbursements. Retain time entry records and invoices for minimum 7 years (varies by province). Some law societies require invoices to display your firm's Law Society license number. Trust account funds must be segregated from operating accounts and reconciled regularly. Review your provincial law society's conduct rules on billing ethics and billing information requirements to ensure compliance—violations can result in disciplinary action.