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Cost of Hiring an Attorney
When making a decision about which attorney to hire, one consideration should be what the attorney’s services will cost.
If a client’s financial resources are limited and there isn’t the risk of a devastating loss in a case, he or she may wish to consider an attorney who charges moderate fees.
Even if a case poses the threat of financial destitution or, in a criminal case, loss of liberty, a client may prefer an attorney with moderate rates.
The best representation does not always come from the attorney charging the highest fees.
Nonetheless, attorneys operate in an open market, and an attorney’s rates tend to reflect his or her reputation, resources, and previous success.
What Types of Financial Arrangements Might an Attorney Make?
Attorneys also vary in their fee arrangements. Often, this will depend upon the types of services being provided.
The most common forms of billing include flat fees, contingent fees, retainer fees, hourly rates, and variable contingent fees.
More information about these types of fees follows:
A flat fee is a dollar amount that the attorney and the client agree on before the attorney begins work.
Many attorneys favor the flat fee because it is a simple transaction and because the fee is paid up front. The attorney identifies an amount of work that the case will require and calculates a reasonable fee based on the time and effort involved.
If the attorney spends less time on the case than anticipated, he may keep the excess fee amount, unless he and client agree otherwise.
However, if the attorney charges a flat fee and the case requires more time and effort than originally anticipated, the attorney may not later demand more money.
An hourly rate is a predetermined amount chargeable for the attorney’s work.
The attorney and client may agree that these fees be paid periodically or in one lump sum at the end of the case. The time that an attorney charges for legal work is called billable time, or billable hours.
Hourly rates vary according to the attorney’s expertise and experience.
Some critics have argued that hourly rates discourage quick work and expedited resolutions. Before agreeing to payment of an hourly rate, <>prospective clients should ask for a written estimate of the number of billable hours that the attorney anticipates will be necessary for the case.
There are times when the costs of litigation can prevent someone from bringing a claim to court. One method of permitting someone to bring their case forward with the assistance of an attorney has been the development of contingent fees as a means of paying the attorney. The idea is that the client will pay for the expenses involved with bringing the case to court, such as filing fees, but the costs of pursuing the case, and the risks and rewards are shared by the client and the attorney. It is important that the client and the attorney fully discuss and document the way in which expenses are to be paid during the case. That aspect of the sharing of the costs is negotiable and is a frequent area of attorney-client conflict.
A contingent fee represents a certain percentage of the recovery in the client’s case. For example, a typical contingent fee might be about one-third of the recovery in an action for personal injury. Attorneys use a contingent fee when the client seeks money damages. Contingent fees cannot be used in:
- divorce cases;
- child custody cases; and,
- criminal cases.
The client does not pay a contingent fee until she or he wins money damages from the defendant. An attorney will offer such a fee if the client stands a good chance of winning a sizeable cash settlement or judgment.
Contingent fees are a gamble for the attorney.
If the client does not win the case, or wins less than anticipated, the attorney may work for little or no pay. Contingent fee percentages vary from case to case. Common contingent fees range from 20 to 40 percent of the client’s recovery.
Fee arrangements can vary greatly from state to state, city to city, and case by case. Some factors to consider when considering a fee structure are:
- The experience of the attorney (both in years and in the subject matter);
- The complexity of the case;
- The novelty of the legal issues;
- The urgency of the case;
- The prevailing attorney fee rate in the community;
- The amount of attorney time that will be needed;
- The amount of staff time that will be needed;
- Whether the attorney will be advancing costs, or not;
- The attorney’s evaluation as to the likelihood that the case will succeed;
- The likelihood of appeal (or whether a different fee rider is added for appeals).
When we weigh these factors for any given case you may find that 40% is just right, or even that 25% is too high, or 50% is too low. Only other attorneys within that jurisdiction and area of practice can give you a valid appraisal of the appropriateness of a fee arrangement for a particular case.
Mixture of Fee Types
Sometimes an attorney will mix a contingent fee with a flat fee or an hourly rate. Another common practice is to base the contingent fee on a sliding scale.
A sliding scale contingent fee provides that the attorney receives a high percentage of the client’s recovery if the recovery is large and a lower percentage if the recovery is small.
A retainer is either a continuing flat fee or an advance on the fee owed for the attorney’s services.
Corporations and wealthy individuals usually use a continuing flat fee retainer. In return for a regular payment, the attorney agrees to be available to handle the client’s day-to-day legal affairs.
Most individuals do not have enough legal concerns to keep an attorney on retainer. The idea behind such a retainer is that a legal relationship is created between the attorney and the client.
The term retainer also refers to an initial fee paid by the client (as in the services of an attorney have been “retained”). Attorneys who charge an hourly rate usually use retainers, but some attorneys add an initial retainer to a contingent fee.
Pro Bono Legal Representation
The term pro bono means “for the good.” In practice, pro bono describes free legal work.
Pro bono work is not required of attorneys, but courts occasionally appoint attorneys to represent an indigent client free of charge. Law firms often perform pro bono work to contribute to their communities and create goodwill for the firm.
Public Legal Services
Legal service organizations exist in all states to provide free or low-cost legal services to qualified persons.
Legal service offices are funded by a variety of sources, including private businesses, individuals, and federal, state, and local governments.
Most legal services offices specialize in certain cases. There are legal services for criminal defendants and legal services for civil matters such as landlord-tenant disputes, domestic violence, immigration, and family issues.
Private Legal Services
Some organizations sell “legal insurance” for a fee. Legal insurance is a form of prepaid legal services.
For a regular fee, the consumer receives certain legal services. These package deals may be offered through labor unions, employers, or other private businesses.
Most legal insurance policies do not cover every possible legal dispute, and the consumer may not be entitled to choose the lawyer.
The consumer should ask many questions to determine the exact scope and nature of the legal representation