Advocates Fee Agreement (Kenya)

An Advocates Fee Agreement in Kenya records the obligations the parties accept and the terms governing their arrangement.

Section 45 of the Advocates Act (Cap. 16) empowers an advocate to enter into a written fee agreement with a client for contentious and non-contentious business. The Advocates (Remuneration) Order prescribes minimum scale fees for a wide range of legal transactions — including conveyancing, probate administration, company formation, and litigation — and an advocate may not charge below the prescribed scale for transactions covered by the Order unless the client obtains independent legal advice and the agreement is approved. For matters not covered by the Advocates (Remuneration) Order, or for matters where the advocate and client agree to a bespoke fee arrangement, a written Advocates Fee Agreement is the primary mechanism for creating enforceable fee obligations.

The Law Society of Kenya (LSK), established under the Law Society of Kenya Act (Cap. 18), regulates the conduct of advocates through its disciplinary powers under Section 53 of the Advocates Act. An advocate who charges excessive fees, fails to account for client funds held in the firm's client account, or breaches the LSK Advocates Practice Rules faces disciplinary proceedings before the LSK Disciplinary Committee and the Advocates Complaints Commission. The Advocates Fee Agreement should confirm the advocate's obligations under the LSK's Client Care Letter standards, including disclosure of the identity of the supervising partner, conflict-of-interest checks, and client money handling obligations.

Legal fees in Kenya attract Value Added Tax (VAT) at 16% under the Value Added Tax Act No. 35 of 2013 where the advocate or law firm is VAT-registered — mandatory for annual taxable turnover exceeding KES 5 million. The Advocates Fee Agreement must confirm whether stated fees are inclusive or exclusive of VAT, and whether disbursements — court filing fees, stamp duty under the Stamp Duty Act (Cap. 480), travel, and third-party expert fees — are billed at cost or with a handling uplift.

Disputes about advocate fees in Kenya follow a specific statutory procedure. Under Section 46 of the Advocates Act (Cap. 16), a client dissatisfied with an advocate's fees may apply to the High Court for taxation (assessment) of the fee note by a Taxing Master. The High Court's Taxing Masters review contentious and non-contentious costs under the Advocates (Remuneration) Order and the Civil Procedure Rules 2010. An Advocates Fee Agreement that clearly specifies the billing basis, scope of work, and payment terms substantially reduces the likelihood of fee disputes proceeding to taxation.

An Advocates Fee Agreement differs from a Legal Retainer Agreement — a broader arrangement covering an ongoing advisory relationship — in that it specifically addresses the fee structure for a defined matter or transaction. For complex litigation or multi-stage transactions, separate fee agreements for each stage or an umbrella engagement letter with per-matter fee schedules provides greater clarity for both the advocate and the client.

An Advocates Fee Agreement in Kenya is required at the outset of any formal advocate-client engagement, and particular circumstances make a written fee agreement especially important.

An Advocates Fee Agreement is needed before an advocate commences representation in High Court litigation, Court of Appeal proceedings, or Employment and Labour Relations Court (ELRC) matters. Without a written fee agreement, the client may dispute the fees payable at the conclusion of proceedings and apply for taxation of the advocate's fee note under Section 46 of the Advocates Act (Cap. 16), placing the advocate in the difficult position of justifying their fees without a written record of the agreed basis.

An Advocates Fee Agreement is required when an advocate is engaged for a major non-contentious transaction — such as a commercial land acquisition subject to stamp duty under the Stamp Duty Act (Cap. 480), a company incorporation through BRS, a mergers and acquisitions transaction subject to Competition Authority of Kenya (CAK) approval, or a Capital Markets Authority (CMA) regulated securities transaction. The Advocates (Remuneration) Order prescribes scale fees for many such transactions, and the written agreement documents whether the advocate is charging the prescribed scale or a negotiated fee with client consent.

An Advocates Fee Agreement is necessary when the legal engagement will extend over multiple months or years — such as regulatory advisory services, ongoing commercial counsel for a Kenyan company, or trust and estate administration under the Law of Succession Act (Cap. 160). A monthly retainer fee agreement provides certainty to both parties about billing expectations throughout the engagement.

An Advocates Fee Agreement is required when a client engages a law firm for a transaction with contingency fee elements — a percentage of the value recovered or the transaction value — which must be documented to be enforceable under Section 45 of the Advocates Act. Contingency fee arrangements in Kenya are subject to the condition that they comply with the Advocates (Remuneration) Order and are not champertous.

An Advocates Fee Agreement is needed when a foreign company or international client engages a Kenyan advocate, as the agreement confirms the governing law (Kenya law), the currency of fees (Kenya Shillings), and the withholding tax obligations on payments to Kenyan advocates from foreign entities under the Income Tax Act (Cap. 470) and KRA iTax platform requirements.

A Kenya Advocates Fee Agreement under the Advocates Act (Cap. 16) and the Advocates (Remuneration) Order must include the following essential elements.

Parties and Advocate Details: Full legal names of the advocate or law firm and the client. The advocate's admission number to the Roll of Advocates of the High Court of Kenya, their law firm's BRS Registration Number if applicable, and the advocate's or firm's KRA PIN for tax compliance. The client's NIC number (for individual clients) or BRS Registration Number (for corporate clients), and the client's KRA PIN.

Scope of Legal Services: A precise description of the matter for which the advocate is engaged — the specific transaction, court proceedings, regulatory application, or advisory service. The scope should identify the court or tribunal (e.g., High Court of Kenya, Environment and Land Court, Employment and Labour Relations Court), the nature of the transaction (e.g., land sale, company registration, debt recovery), and any limitations on the advocate's engagement. Work outside the agreed scope requires a separate written instruction.

Fee Basis and Rates: The agreed basis for calculating the advocate's fees — hourly rate (in KES per hour, by advocate seniority), fixed fee for a defined piece of work, scale fee under the Advocates (Remuneration) Order for scheduled transactions, percentage of transaction value, or monthly retainer. The agreement should specify whether VAT at 16% is included in or added to the stated fees. Hourly rates for senior partners at major Nairobi law firms typically range from KES 15,000 to KES 50,000 per hour; rates at regional firms are generally lower.

Disbursements: A clear statement that disbursements — court filing fees, Land Registry fees at the Ministry of Lands, stamp duty under the Stamp Duty Act (Cap. 480), counsel fees, travel expenses, courier, and third-party expert fees — will be billed at actual cost and itemised on each invoice. Disbursements should not be included in the advocate's fee without itemisation, as the Taxing Master will disallow undisclosed disbursements on taxation.

Billing Frequency and Payment Terms: The advocate's billing cycle (monthly, per stage, or at matter completion), the number of days within which the client must pay fee notes (typically 30 days from invoice date), and interest on overdue invoices. Under Section 46 of the Advocates Act (Cap. 16), an advocate may apply for a charging order over property recovered or preserved in proceedings if fees remain unpaid.

Client Money Handling: Confirmation that all client money received by the advocate — including advance payments on account of fees and disbursements — will be held in the firm's client bank account separate from the firm's own funds, in compliance with the LSK Advocates Practice Rules on client account management.

Fee Dispute Resolution: The procedure for raising a fee dispute — first by written objection to the advocate or firm, then by taxation of the advocate's bill under Section 46 of the Advocates Act before the High Court Taxing Master. The forms-legal.com Advocates Fee Agreement template includes a mediation step before taxation, consistent with LSK guidelines on client dispute resolution.

Termination: Either party's right to terminate the engagement on reasonable written notice, the advocate's right to apply for leave to come off the court record on non-payment of fees, and the client's obligation to collect original documents and files from the advocate's office within a specified period after termination.

Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010.