Most clients have a maximum amount of money they can spend on a case, but may not know what legal services they can afford with that amount. There are several factors that may influence how much your legal case will cost. These include:
- The estimated costs of the services as presented in a written fee agreement
- The types of fees that your attorney charges
- The complexity or uniqueness of the case
- The skill/experience level of the attorney or law firm
- The scope of representation
- The going rate in your geographic location
These factors should be discussed with a lawyer before you decide to hire them. This is particularly important when you, as a client, are on a limited budget. The old adage “you get what you pay for” can certainly be true in law. However, it is equally important for clients to get good value for the money they spend. By understanding how legal billing works, you can get the legal representation that you need for a fair price.
It is important to understand what services an attorney will provide, when they will provide them, and how much the case will cost. When you decide to hire an attorney, you will make a written fee agreement that should cover these details. It is very important to ask questions at that time about what exactly the attorney is agreeing to do; this is known as the “scope of representation” and will be discussed further below. If you have budgetary limitations, it is important to let your attorney know what they are so that your case can be planned accordingly. There may be several ways to reduce your legal fees. When you have an ongoing case, what you initially negotiate and agree to pay is the chief factor in what your bill will be at the conclusion.
There are different fees that lawyers usually charge during a case. In some agreements, there may be more than one type of fee involved. If you have a limited budget, flat-rate or contingency fee lawyers may help you get good value for your money, and you may wish to avoid arrangements with extensive consultation fees or high hourly rates. Here are the most common types of client fees:
- Initial consultations and consultation fees: Some lawyers charge a consultation fee for the initial meeting with a client, while others offer free consultations. Any consultation, free or paid, is an opportunity to discuss what legal services a lawyer can provide given your particular case. It will also be an opportunity to discuss future client billing.
- Retainer fees: An attorney or firm may charge a retainer fee, which is an advance payment that represents a portion of what you will owe for services. The attorney should bill the retainer as they work, rather than bill you directly. Any unused portion of a retainer should be given back to you. Retainer fees can range anywhere from several hundred to several thousands of dollars, depending on the attorney or firm.
- Flat rate: A flat rate is generally a fee for doing a specific task or type of case. For example, some lawyers will charge a set figure in the thousands for handling a DUI case or a divorce, regardless of the complexity of the case. More often, however, a flat rate is used when a singular filing or only a letter is required. This can be the cheapest solution in certain situations. Keep in mind, though, that an attorney who charges a flat rate for one task has not necessarily agreed to represent that client beyond that task. Some examples of current flat rates are:
- Demand letter (usually for payment): $100-400+
- Incorporation of a small business: $1,000-$5,000+
- Simple contract drafting: $600-$2,000+
- Contract review, depending on length: $100-$1000+
- Cease and desist letter for intellectual property infringement: $200-$750+
- Legal opinion, case review, or research letter, depending on the complexity of the underlying matter: $750-$4,000+
- Hourly rate: Some attorneys charge an hourly rate for their services. If a case is with a larger firm, several different hourly rates may be charged depending on which attorney is working on your case at a given time. Make sure that you know what services are included in the hourly rate, and negotiate the hourly rate carefully. Hourly rates vary widely, from $50 an hour or so to well over $1,000 an hour. If you have an hourly rate arrangement, it is especially important to tell an attorney your budget so that they can get your permission before exceeding what you can pay.
- Contingency fee: Contingency fee lawyers generally handle personal injury cases or other matters where there may be a large monetary settlement or verdict. Contingency fee arrangements are generally not allowed in criminal law or family law cases. As payment, a lawyer handling a lawsuit on a contingency fee basis collects a percentage of the net recovery from a lawsuit per the fee agreement.
- Other expenses: A client generally pays for filing fees, photocopying, long distance phone calls, shipping charges, court reporter and expert witness charges, and some travel/transportation charges if these fees are not included in the attorney’s rate. Depending on the case, there may be other miscellaneous expenses. Your attorney should be able to provide some idea of what these expenses will be.
Complex or unique cases present more challenges for attorneys. With complex cases, there can be a lot of time spent managing paperwork, investigating, and writing. With unique cases, attorneys may need to do quite a bit of research to come up with a brand new legal argument. Thus, an attorney is likely to charge more money for a more complex case.
Lawyers who have many years of experience tend to charge more money for their services, as do older firms with a reputation for excellence. Law firms and attorneys that specialize in very technical or complicated areas of the law also typically charge more. Newer lawyers tend to charge less because they have less experience and are trying to build a client base and a reputation.
Generally, the wider the scope of representation, the more expensive it will be. For example, an attorney who charges a flat rate to perform a very specific task will cost less than an attorney who agrees to handle any and all aspects of your legal case. During an initial meeting, it is important to discuss what the scope of representation will be, so that you know exactly what you are paying for.
One major factor in the wide range of hourly rates, flat fees, and other costs is geography. If you live in a major city such as New York or Chicago, you will typically have to pay more money for a lawyer. On the other hand, you may also have access to more attorneys or organizations that can provide sliding-scale or pro bono services. In some rural areas, legal services may be significantly less expensive, but you may also be faced with fewer options for legal representation.
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