You may not actually need money to hire a lawyer. Most personal injury lawyers work on contingency.
When a lawyer works on contingency, he may not require payment unless he recovers the claim. Lawyers and clients usually agree on payment amounts before they begin working on a case. Often, this fee is a percentage of the total recovery amount, but it can also be a flat fee.
At the end of the case, the lawyer will take their portion out of the total award and give the balance to the client. As a result, the injured person can recover without paying the lawyer upfront.
Trading for services is also an option for some lawyers. For example, a lawyer could trade legal services for the construction of a website if the client is good at graphic design. A restaurant owner might offer free meals to defend an employment dispute.
What if the Attorney I Want is Outside My Budget?
It is not uncommon for clients to find an attorney they believe is right, but the price is too high. It is perfectly acceptable for the client to negotiate the price in this situation. Similarly, the client could request a payment plan whereby the client agrees to pay small portions of the bill over time.
Finally, if the client and attorney cannot reach an agreement, the client might want to seek out another lawyer. Hiring a younger lawyer is not a problem. Younger lawyers may be more aware of recent developments in the law, even though they are less experienced. It is more likely that a younger lawyer will have fewer clients, allowing them to devote more time to your case.
Refund for Unearned Legal Fees
When you hire an attorney, you are usually required to pay a lump sum upfront. This sum is called a retainer. Your attorney will bill their hourly rate, and they will use the money in this retainer to pay it instead of sending you a bill.
Over $100 billion is spent each year on legal fees by Americans. Fees have increased twice as fast as inflation since 1990 despite a sluggish economy.
Ethical attorneys collect most of these fees by providing valuable, efficient services to their clients. Still, many of them are paid due to incompetent lawyering, purposeful padding of bills, ethical violations, or improper coercion of collection.
Clients who believe their lawyer has overbilled them may be entitled to a refund for unearned legal fees.
At first glance, fighting your lawyer’s fees may seem daunting.
Your lawyer will likely represent your interests in ongoing matters. Because your lawyer is the last person you want as an adversary in a lawsuit, you may feel obligated to pay outstanding bills, even if they are outrageous. Your lawyer has superior legal knowledge if a billing dispute arises.
If they have to collect his fees, you assume they’ll become a 21st-century “Matlock.” It doesn’t appeal to you to pay another lawyer to oppose another attorney’s fee request. Lastly, you may feel that the legal system will protect its own and uphold the fee regardless of the facts of your case.
A client who receives an excessive bill due to unethical lawyering, waste, or incompetence can resolve these concerns with a sensible, managed approach. It is possible to communicate your concerns to your lawyer during and after the engagement. Questioning bills appropriately can lead to mutually-agreed reductions, strengthening the attorney-client relationship.
When all else fails, fee dispute litigation can provide substantial relief from some relatively common examples of attorney overbilling while protecting an attorney’s right to a reasonable fee.
Are Attorneys Required to Refund Legal Fees?
The cost of hiring a lawyer can be high. Most lawyers draw off a lump sum of money as your case progresses. If your legal issue resolves quickly, what should you do?
The good news is that attorneys are required to refund any unearned legal fees.
Every state bar association has enacted its own rules of professional conduct. Most of these are based on the Model Rules of Professional Conduct of the American Bar Association (ABA).
Attorneys must refund unearned legal fees in each state. Those who fail to comply with this requirement will face sanctions, suspensions, and disbarment.
The rules vary from state to state. A few states, such as Georgia, allow some legal fees to be non-refundable based on the fee agreement. Make sure you understand an attorney’s fee structure before hiring them.
What Happens If I Paid More Than My Lawyer Earned?
What should you do when the total amount billed by your attorney does not exhaust the retainer fee? This could happen if you decide to stop pursuing legal action or your case ends unexpectedly through a settlement or other means.
The good news is that you should be able to receive a refund on the money that is left over after covering all of the legal fees. Ask your lawyer for final accounting and a refund of unearned legal fees.
Earned Fees: How Lawyers Should Handle Them
Earned fees are never deposited in a trust – that’s how they’re handled. The lawyer owns the earned fees, not the client.
Clients’ money is kept in trust accounts. Earned fees are deposited exclusively into the firm’s operating account. Under the rules against commingling and depositing personal funds, the deposit of personal funds into trust (beyond those reasonably necessary to pay bank fees) is prohibited.
Fees for Advanced Payments
In some jurisdictions, advanced (yet unearned) fees must be held in trust. A lawyer can choose to place advanced fees in a trust, but California does not require it.
Even though many lawyers believe that this is the best approach, depositing advanced fees into the operating account will not violate any ethical rules.
Advance fees must be placed in trust in DC unless otherwise agreed by the client. Florida and many other states require advanced fees to be placed in trust.
If your state does not require advanced fees to be held in trust, you can deposit the entire check into the firm’s operating account. If the fees are never earned, they must be earmarked as still subject to refund to the client.
In addition, it is acceptable to place the entire check in a trust, then write a check from the trust to the operating account since it is permissible to put advanced fees in trust.
The client’s check should include both advanced costs (which must be held in trust) and a non-refundable retainer (which belongs to the attorney).
The State Bar of California’s Handbook on Client Trust Accounting for California Attorneys addresses the issue explicitly. The State Bar of California instructs lawyers to deposit the check in a trust and to withdraw from the trust the amount of the non-refundable retainer as soon as the check clears and funds are available.
Do I Need an Attorney?
Depending on your situation, especially if there has been legal malpractice, it might be best to consult with a separate attorney if you are in the middle of a fee dispute with your attorney.
If you feel the fee is unreasonable, an attorney can help you bring your former attorney to court to recover the money you have already paid.