In terms of attorneys’ fees, hourly rates are the most common type of fee structure. Depending on a lawyer’s experience and location, an hourly rate can vary considerably. While cheaper might be better in terms of accessibility, a more expensive and experienced lawyer may be able to handle your case faster and better. While you are at the consultation, you should remember to ask for an estimate of how many hours you can expect to pay for.
Flat fees are generally charged when the services that are being provided are more predictable. As such, it is important to ask the lawyer exactly what services and expenses are and are not covered in a flat fee.
A contingency fee means the lawyer charges no fee, but earns a percentage of the settlement or judgment, if any is awarded. Contingent fees are generally one-third of the settlement or judgment, and can be negotiated. However, in some cases, contingent fees are prohibited.
Retainer fees are advanced payments that are based on an hourly rate. Clients put money into a special account, and the lawyer deducts fees from this account as services are completed. The client is responsible for reviewing the account periodically, and should be aware that the retainer fee is generally refundable if it is not used by the lawyer.
A statutory fee is a fee that is set by law. Some legal work requires the court to set or approve the fee, which can vary from state to state. No matter which type of fee structure is agreed upon between you and your attorney, you should always obtain proof of the agreement in writing.
In addition to lawyer’s fees, you could be expected to pay certain expenses. These should be discussed before hiring a lawyer, and they should be willing to provide explanations of these charges with each monthly bill. Review your response carefully in order to determine which expenses are included in your legal fee, and which expenses will be separate.
A client generally pays for the following expenses:
- Photocopying charges;
- Long distance telephone charges;
- Courier, postage, and overnight delivery charges;
- Filing fees;
- Court reporter and expert witness charges; and
- Reasonable travel and transportation charges when necessary.
A client generally does not pay the following expenses:
- Standard secretarial and office staff services;
- Standard office supplies;
- Local telephone charges;
- In-town meals; and
- First-class travel costs, as well as out of town meals without restrictions.
What Is Fee Shifting?
Fee-shifting statutes and rules vary from state to state, but generally require the loser in a legal matter to pay for the legal fees and costs of the prevailing party. However, there are some circumstances in which the fees are solely shifted so that losing defendants must pay the plaintiff’s reasonable attorney fees and costs. The intention is to attract lawyers to public interest cases that otherwise would not seem to be worth the investment.
The “American Rule” requires each party to be responsible for its own attorney’s fees in litigation, barring any statutory or contractual exception. Fee-shifting provisions are an example of an exception to that general rule. Clients do not pay advance fees or retainers; rather, attorneys collect payments through the fee-shifting provision, or through a settlement agreement. This threat of paying attorney’s fees can increase pressure on the opposing party to settle the case quickly.
Massachusetts General Laws Ch. 186, Section 14 would be a good example of a fee-shifting statute. It provides for reasonable attorney’s fees in specific landlord-tenant disputes, such as when the landlord is in violation and subsequently loses the case. An example of this would be how tenants who are facing eviction generally face the greatest difficulty in obtaining a lawyer. However, the availability of attorney’s fees influence lawyers to be more likely to accept cases on behalf of tenants against their landlords.
When Will Courts Award Attorneys’ Fees?
In the United States, each party to a lawsuit generally pays their own lawyer. To reiterate, this is known as the “American Rule,” as in many other countries the losing party pays these fees. However, there are two situations in which a court may order the losing party to pay the winner’s legal fees. This is referred to as “fee shifting,” which was previously discussed:
- Statute: Congress has passed a number of laws allowing for fee shifting under specific circumstances. These generally involve cases associated with issues of public policy, and are designed to help level the playing field between private plaintiffs and corporate or government defendants. As such, fee shifting is most common in the following types of legal disputes:
- Court Order: While not especially common, courts do have the authority to award attorneys’ fees. An example of this would be when the court feels that one party was acting in bad faith, such as specific actions during the lawsuit, or conduct that gave rise to the suit. The court may order that party to pay the other party’s legal fees.
What Else Should I Know About Attorneys’ Fees In General?
While the services of a lawyer are generally not free, there is a common misconception that they are unaffordable for most people. Legal professionals bill not only based on the value of their services, but also by what their client’s needs are.
To reiterate, lawyer fees differ depending upon the area of law. An example of this would be how fees may be different for the following types of lawyers:
In addition to the location and expertise of an attorney, some other examples of factors that cause costs to vary include:
- Type of Representation: Put simply, the more complex the matter, the more likely it is to cost more for services;
- Services Performed: If an attorney is performing multiple services, the overall cost of representation will also likely rise. However, a lawyer may offer to bundle such services at a fixed cost, keeping the overall expense of representation comparatively low; and/or
- Fee Arrangement: To reiterate, the fee structure utilized by an attorney will ultimately make a considerable difference in the overall cost of representation.
Some examples of common areas and fees normally charged for specific cases include:
- Injury or accident cases are generally billed by a contingency fee;
- Civil and Family law cases are generally billed on an hourly basis. However, it is more common for divorces to be handled on a flat fee basis. In any case, you should expect to pay a retainer fee;
- Criminal cases are generally paid by a flat fee, up front; and
- Routine cases are generally paid with a flat fee, such as for writing a will or getting a power of attorney.
Below are the factors that you should take into consideration when determining if the fee that you pay is reasonable and fair:
- The amount of time and the effort that your lawyer has put into the case;
- The difficulty of the case;
- What skills are required to properly perform the necessary legal services;
- What fees are generally charged in the same area for similar legal services provided by lawyers with similar skill, reputation, and experience;
- The amount of money involved in the lawsuit;
- The results obtained, which is a factor if you have agreed to a contingency fee; and
- Whether the rate is fixed or contingent.
Do I Need A Lawyer For Help With Attorneys’ Fees Awarded By The Court?
If you have been involved in or are considering filing a lawsuit, you should speak with your attorney about the potential for fee shifting in your case. An experienced lawyer will be able to help you understand your state’s laws regarding the matter.