Attorney fee introduction
Attorney Fees - Attorneys must seek
legal services fees for their services.
Not only are attorneys responsible for their own personal
income, attorney fees also support the staff that they employ and pay
for the overhead of running an office.
Attorneys in many firms must also contribute to the
partnership. Like any
company, law firms are in business to make a profit.
The expenses of
running a law office are seldom
cheap. An attorney that runs a broken down, ill-equipped office
would not only suffer the consequences of not being able to operate
efficiently, they would not be able to attract the clients that they
need to make their business successful.
An attractive office is a direct reflection on their
perceived ability as a lawyer.
fees in general
are usually the biggest and scariest part of deciding to hire an
attorney. In most cases, the client will ask about attorney
fees in the first meeting and there may be an up front charge
for the initial consultation. Some do, some don't.
Unless it is a standard case where most facts are known, attorneys
must give you a guess as to the amount of their fees. Too
often, there are unknowns when a case begins and some clients will
even lie about the case.
You should always
explain your case fully. Give all the facts to the attorney
even if they are not in your favor or somewhat embarrassing.
Unless your attorney knows everything, it's not reasonable to expect
that he or she can advise you properly or give you an accurate idea
what fees will be incurred.
Under the law in
every state, your conversation is protected by attorney-client
confidentiality laws. Short of planning a crime and telling
the attorney about it, nothing you say can be released Therefore, you can feel free to be,
and should be totally honest.
generally three methods that attorneys have for charging their fees
though there may be some that will offer an alternative or
combination between them:
Flat attorney fees
Flat attorney fees or fixed rate services are generally reserved for services such as
wills, start-up incorporation,
uncontested divorces, drafting of routine documents, and other
services where a reasonable determination of time and resources can
You can often shop these rates but be careful because the fee
amount isn’t the only factor that you should consider. See finding
the right attorney.
Contingency attorney fees
You have probably seen television commercials where the
spokes-person says something like, “We only get paid if you do.”
That reference is to a contingency fee structure.
You will not have to pay anything up front (though you may
have court filing costs) or along the way, no matter how long the
case takes or what resources are required.
The attorney pulls all*
costs out of his/her own pocket until
the case is either settled out of court or decided by the court.
At that time, the attorney is due a percentage of the award
* Some states
require that you pay certain filing fees.
will vary, but a standard contingency agreement may allow the
attorney one fourth of an out-of-court settlement or one third of a
settlement if you go to court.
This may sound rather high, but consider that nothing is
guaranteed in any lawsuit. In
cases where the cases is lost, the contingency agreement says that
there will be no attorney fees.
Be sure that
you fully understand the contingency fee percentages before you sign any agreements.
Needless to say,
contingency fee agreements are not appropriate in many cases.
They are generally reserved for such cases where there is an
injured party and the attorney believes that there is a very high
probability of winning, though the amount is yet to be determined.
While the attorney realizes a nice income from a large
contingency settlement or award, few awards are considered high.
Multi-million dollar settlements are the ones that you hear about on
the news but they are a rarity and such settlements are generally only
possible in cases where there are debilitating, life-long injuries
requiring extensive treatment or care.
Even so, large awards
are often appealed and can take a long time to collect. Other
times, they are
settled between the parties at a much lower amount than given in the
original award, in order to avoid
further action and delay.
the most part, settlements cover costs, time off from work or other compensatory
damages, which might include pain and suffering. Except in
cases of extreme negligence or intentional misconduct, few cases
will be awarded any significant punitive damages.
advantage of a contingency fee schedule is that the client can
afford legal representation when many times, they otherwise could not. Someone
who has been injured in an accident may have a great case but
doesn't have the financial means to hire an attorney and pay by the
hour. The contingency agreement is the only viable means of
pressing the case forward.
The other advantage to a client in taking a contingency fee
agreement is that the attorney is basically working on commission
and his/her income will be directly linked to the effort that they
put into it. In other words, the more the client makes, the more the
Attorneys are generally allowed to set up any fee structure that
they choose and there are no regulations that govern what attorneys
are allowed to charge. They are primarily market-driven.
fee structures are often reserved for situations where there are
unknown and potentially complicating factors. Examples of such
would include litigation, contested divorces, and large estates, or
estates where there is a family business involved.
multiple-partner law firms, the fee schedule is often
set by the partnership. What
governs those fees can be somewhat complicated and there is no
formula for determining what they should be.
Several factors are often considered in setting up a fee
An attorney in Santa Barbara, CA has much higher expenses than
one in El Paso Texas. Expect
that when all other things are equal, the attorney in Santa
Barbara will charge more for similar services.
practice (field of law): An attorney that only handles traffic
cases will certainly have
lower fees than a litigation attorney who handles product
Like any profession, there are those cases that are simple while
others have complicating factors. Settling an estate that has a
large family business attached to it will take a lot more time and
resources than one that does not.
Some attorneys will limit their practice to a very narrow
area. Others could be considered to be an expert in multiple
areas of law or other non-law services such as accounting or
medical science. The later often find themselves
representing clients with more complicated cases where their
expertise comes in handy.
Theoretically, the longer an attorney is practicing in a given
area of law, the better they become at it.
When that happens, your chances of a better outcome may
increase significantly. In general, you
should expect that a seasoned and successful attorney would have
higher rates than someone who has just started a law career.
When an attorney
is charging by the hour, you will probably have to pay a retainer
fee before any work is done on your behalf.
A retainer is simply fees paid in a lump sum, in advance.
Think of the retainer as a deposit in an account to which
your attorney has the right to withdraw from as services are
performed and fees are generated.
The amount of the
retainer may be negotiated between you and the attorney, but will
likely be several thousands of dollars and be dependant upon the
anticipated number of hours that will be required in the near
If those fees
are exhausted, it is very likely that your attorney will request
additional fees so that work may continue.
However, if a portion of your retainer is not used at the
completion of the case, you are entitled to receive that portion
back as a refund.
employ other individuals that are billable as well.
Legal secretaries, researchers, investigators, etc are all
billable per hour though their rates are usually significantly less
than the attorney’s rate. You
wouldn’t want an attorney to be filling out standard forms when a
legal secretary could do the same at one-third the cost.
Remember that you
are entitled to review your attorney’s time logs.
All attorneys that work by the hour must keep an accurate
time log showing when and what services were performed and the
amount of time allocated to that service.
Many attorneys will send out a monthly statement of account
showing what hours were used during that month and all credits and
debits against your account.
In addition to the fees generated by the work of the attorney
and their employees, you may see other fees develop as a part of the
on the requirements of the case, the attorney may need
to arrange for the services of outside personnel such as a court
reporter, research agents, experts, investigators, etc.
There could also be other costs that would fall under the
category of expenses such as travel, court fees, and others.
Regardless of the fee structure, the nature and amount of the
fees should be fully explained to you by your attorney before you
sign any documents and before any work is performed.
Equally important is a complete explanation of the services
that will be performed under those fees and any potential other
costs that may arise.
Be sure to ask any questions that you may have before you sign
any documents. A good
attorney wants you to fully understand what you are agreeing to pay.
Even when an attorney is charging by the hour, be sure to ask
for an approximation of the total bill.
Remember though, this is an approximation based on past
experience and every case is different.
Circumstances may arise that will cause your final bill to be
more or less than the original estimate.
If the attorney
seems vague about the costs, you owe it to yourself to persist until
you get an answer that makes sense to you.
If an attorney still seems vague or won’t answer your
questions, it is probably time to seek a different attorney.