Hiring a lawyer can seem very disjointed to those who do not have any experience in the legal field. One question that many individuals forget to ask is how lawyers charge.
There are many different ways that attorneys usually bill their clients:
- Hourly Fees: This is where the lawyer charges based on the number of hours of work they put into your case. This is the most common fee used in both civil and criminal cases. The total amount of hours will differ greatly depending on the nature of the case. Be sure to ask your lawyer for an estimate of hours if they will be charging on an hourly basis.
- Flat Fees: This is an overall charge paid upfront for the entirety of the legal representation. It is usually employed when the services are more predictable, such as in criminal cases. Your attorney should explain which costs and services are included in the flat fee.
- Retainer Fee: This is an advanced payment (like a down payment) when the attorney charges an hourly rate. The client deposits their funds into the attorney’s trust account, and the attorney will subtract fees as the services are conducted. Any remaining retainer fees are typically refundable to the client.
- Statutory Fee: this is a fixed fee set by law or statute. Some types of legal work require the court to approve the fee.
What Are Contingency Fees?
A contingency fee means that your attorney will not charge a specific amount. Instead, your attorney will earn a percentage of the judgment awarded, if any. The word contingent means “depending upon,” which means that the amount your attorney takes depends on the outcome of the lawsuit.
Most contingent fees are in the amount of one-third of the judgment or settlement amount. Thus, if you are awarded $90,000, your attorney will be entitled to one-third: $30,000. This percentage can be negotiated between you and your lawyer, depending on the type of claim. In some cases, such as divorce cases, contingent fees are prohibited.
Contingent fee arrangements are most commonly used in personal injury and employment cases, but they can also be found in real estate, probate, and business litigation matters.
What Determines How Much a Lawyer Costs?
While the services of a lawyer are usually not free, there is a common misconception that they are unaffordable for most individuals. The reality is that legal professionals bill based not only on the value of their services but also on their client’s needs and a myriad of other factors.
It’s already difficult to figure out how to choose the right attorney for you, but the cost is another aspect that clients need to keep in mind.
Do Legal Fees Vary Depending on the Area of Law?
Lawyer fees vary depending upon the area of law. For instance, fees may be different for the following types of attorneys:
What Causes the Costs of Legal Representation to Differ?
One should expect to pay more for a veteran attorney in a large city than a recently minted lawyer in a rural area. In addition to the background and expertise of an attorney, there are a handful of other factors that cause costs to differ, such as:
- Type of Representation: The more intricate the matter, the more likely it will cost more for services. This is also true for otherwise routine, simple issues that have been complicated by aggravating factors or circumstances.
- Services Performed: If an attorney performs multiple services, the general cost of representation will also likely rise. Nevertheless, a lawyer may offer to bundle such services at a fixed price, keeping the overall cost of representation comparatively low.
- Fee Arrangement: Whether a lawyer is billing on a contingency fee plus an hourly basis, requires a flat fee, is retained and advises on a need by need basis, or has been hired as in-house counsel will ultimately make a giant in the general cost of representation.
What Are the Common Fees in Different Areas?
In different areas, attorneys usually use a certain kind of fee. Below are some examples of common areas and fees normally charged for such a case:
- Injury or accident cases are usually billed by a contingency fee.
- Civil and family law cases are usually billed on an hourly basis, which can differ greatly depending on the case and the lawyer. It is more common for divorces to be handled on a flat fee basis. In any event, expect to pay a retainer fee.
- A flat fee usually pays criminal cases upfront.
- Routine cases are usually paid with a flat fee, like writing a will, a real estate closing, an uncontested divorce, or getting a power of attorney.
What Should I Do If My Lawyer’s Bill Seems Too High?
The legal bill is one of the most significant sources of disputes between lawyers and their clients. Individuals are often shocked by the amount they are charged for legal services.
Yet, they simply pay it because they are scared, or disputing the bill seems like a nuisance. Nevertheless, you have a few options if you are concerned about the amount you have been charged.
Talk to Your Lawyer
Your first step should be to describe your concerns to your lawyer. While this might be a somewhat awkward conversation, you may save yourself from more significant unpleasantness down the road. For example, you may find out that you misunderstood the agreement or that your case was more difficult than you had thought. On the other hand, your lawyer might discover that a mistake was made on the bill.
Here are some factors that may decide whether you have been charged reasonable attorney fees:
- The type of case
- The difficulty of the case
- Whether the case prevented the lawyer from seeking other work
- The experience of the lawyer
- The time and labor the case required
- Other expenses, such as hiring experts or court fees.
If discussing your bill does not resolve the problem, a good option to consider is fee arbitration. Under fee arbitration, a neutral third party will hear your side and your attorney’s side of the story and then decide what a fair price is for the legal services you received.
Some states, such as California, New Jersey, and Washington D.C., require mandatory fee arbitration if you conflict with your attorney concerning the bill. Fee arbitration is a great low-cost, easy way to resolve billing disputes.
Filing a Lawsuit
There are a few states that do not offer fee arbitration. Also, in many states where it is offered, a lawyer can decide not to participate. In these examples, a lawsuit might be your only choice. Nonetheless, keep in mind that the expenses and time associated with a new lawsuit may outweigh the amount you believe you have been overbilled.
Should Legal Fees Be Discussed Before I Hire a Lawyer?
Yes, all costs should be discussed before hiring a lawyer. The above list is an example of costs, and there may be other costs during the suit. Make sure you understand all the costs you have to pay to stop disagreements with your attorney when the bill comes. If you want to keep costs under control, you can tell your attorney that you have to approve expenses over a certain amount in advance.
Should I Hire Another Lawyer to Handle a Dispute with My Lawyer?
If you cannot resolve your bill with your attorney, you should consider speaking with another attorney to help you understand and navigate the arbitration or potential litigation process. An experienced products and services attorney can explain your rights and the best options for you.