You wouldn’t buy a car without knowing how much it will cost and what your payment arrangement is, so why hire a lawyer before knowing how much and how you are going to pay? Legal services aren’t cheap and by knowing what your fee arrangement with a lawyer is, you can effectively budget and avoid payment difficulties. Therefore, it is extremely important that you take the time to discuss fees with your lawyer prior to any work being done by your lawyer. You should not feel shy and uncomfortable in bringing up the fees and billing practices, as this discussion is as important to your potential lawyer as it is to you.
Typical Fee Arrangements:
Hourly Rate: This is the most common arrangement. With this arrangement, the lawyer will charge you for each hour, or portion of an hour, that he or she spends working on your case. Be sure to discuss with the lawyer what is included in the hourly rate, and if he or she has different hourly rates for different services. In addition, be sure to ask about other staff, such as paralegals and legal secretaries, and how their time will be charged. Will it be hourly as well and if so at what rate?
Flat Fees: The lawyer will charge you a specified total fee for his or her services. Usually, flat fees are charged for certain types of relatively simple and routine legal work. Examples include wills, simple bankruptcy filings, uncontested divorces, and power of attorneys. Once again, be sure to ask what the flat fee does and does not cover. Does it include filing fees, photocopying, or other incidentals, or are those billed separately?
Contingency Fees: Under this arrangement, the attorney doesn’t charge the client a fee, but receives a percentage of the settlement in the case, usually one-third of the settlement. If the lawyer looses the case, they do not get paid. However, you will still have to pay expenses such as court costs whether you win or lose the case. Be sure to ask your lawyer if the fee is calculated before or after these expenses. Contingent fee arrangements are typical for personal injury cases, accident claims, and debt collection cases.
Retainer Fees: This arrangement has many different forms and ranges from a fee the client pays to retain the lawyer regardless of whether the lawyer’s services are needed; to a fee that is paid in advance and is deducted from as a lawyer’s services are rendered. Be cautious, as most retainer fees are non-refundable.
Typical Costs of Lawyer’s Fees: All fees vary based on the geographical location, the experience of the attorney, prominence of the lawyer, and the difficulty of the case. It is typical for lawyers in urban or metropolitan areas to charge higher fees than lawyers in small or rural towns. Also the more prominent a lawyer is, or the more experienced he or she is, the more the lawyer will charge. Finally, the more difficult the case, the greater the probability of higher fees. Because of all of these factors, it is hard to say what a typical rate for any of the fee arrangements is. For instance, based on these factors, the hourly rate can range from $50 to $1,000 per hour. It is for this reason that you should speak to several lawyers in your area to know what “typical” is before deciding on a lawyer.
Minimizing Your Legal Bills: You are the consumer when it comes to your case and you have the ability to influence how much you pay. Below are some quick tips for keeping your legal bills down.
- Occasionally a lawyer’s fee may be negotiable based on your case and how significant your attorney fees could be, so do not be afraid to ask. It is possible that instead of the hourly fee the attorney typically charges, he or she would agree to a flat fee if it could save you money but was still beneficial to the lawyer. Discuss your options and ask questions.
- Do not get hung up on wanting a big law firm because you think bigger is better. Smaller firms usually charge lower rates and are experienced enough to provide great legal services to suit most consumers’ needs.
- If you choose a large law firm, ask whether a senior partner or an associate will be working on your case. While associates may be able to effectively handle your case, it may take them longer than a senior partner. You will be charged a cheaper hourly rate for the associate, but if it takes them longer it may end up costing you more.
- See if there is work you can do that the lawyer would charge you for, such as writing a letter to get copies of miscellaneous records.
- Maximize any contact you make with your lawyer as you are getting charged for every meeting and phone call. Do this by being prepared for meetings and calls with your lawyer. Write down questions and have information gathered prior to the contact. Furthermore, refrain from calling your lawyer with every question if possible. Consolidate your questions and make one phone call. Also, ask your lawyer if you will be charged for their travel time. If so, to save yourself money, travel to his or her office to meet rather than having them travel to you.
- Finally, request that your bill be sent on a regular basis so that you have a chance to examine exactly how and for what you are being charged. This will allow you to not only ask questions if you are unsure of a charge, but will give you more chances to makes changes so you can communicate more efficiently and effectively with your lawyer.
Regardless of what fee arrangement you make with your lawyer, it is extremely important that all of the details are put in writing. This will help keep miscommunication to a minimum and ensure a smooth relationship with your attorney. Money is important to both you and your lawyer, but it shouldn’t overshadow the importance of your legal need or case.