If you’re new to hiring an attorney, it is helpful to know that one of the biggest areas of frustration between clients and attorneys is the payment of attorney fees. We want you to have an idea of what to expect when searching for legal services:

Retainer:  Hourly Billing

The most common attorney fee structure is hourly billing, and your retainer payment is essentially a “down payment” for the billing of legal services and costs. Work usually doesn’t begin until the retainer has been paid. Monthly billing statements reflect the work conducted and billed against the retainer. When your initial retainer has been exhausted, your attorney may require that an additional retainer amount be paid. In some cases, the attorney will agree to proceed without an additional retainer, but with payment due and payable upon monthly billing.

Tip: Ask your attorney at what intervals additional retainers might be expected in your case.

Flat Fee: Think “One-And-Done”

Many legal services are quite routine and predictable, making them suitable for a flat fee. A flat fee is the cost of a single matter. You often see attorneys charge flat fees when the work is pretty straightforward (i.e., basic estate planning, traffic citations, bankruptcies, drafting contracts, and some criminal cases). Here, the client does not get a refund if the matter settles quickly. On the other hand, if the matter takes more work than expected, no additional fee is collected. If you are paying a flat fee, ask if your flat fee is refundable (in whole or part). Usually, the flat fee you pay is non-refundable.

Contingency Fee: Share The Success

Here, you are seeking a monetary settlement, most commonly in personal injury or medical malpractice-type cases. The client usually does not pay for upfront costs or retainers. Upon meeting with you, the attorney factors their risks (medical record costs, evaluations, experts, etc.) against the potential award of your claim. They may decline your case after weighing these factors. If the attorney sees a likelihood of success in your case, the lawyer would be entitled to their set percentage of the gross award.

Laws on contingency fees vary by state. Typically, contingency fees are in the range of 33 1/3 percent to 40 percent of the gross award. The fee percentage rate may increase to the top of the range if your case goes to trial. Many cases will settle well before the trial phase. Be clear on how your percentages are calculated and if they might escalate at some point. Also, expect to sign an informed consent acknowledging the risks of your case and the expectations for the potential outcome.

This is not an appropriate fee structure for criminal cases.

Fee Agreement: Yes, Please

Your attorney should provide you with a fee agreement tailored to your particular case. It should cover the service the attorney provides for you, how you will be charged, and in what manner. This agreement also guides the collection of costs and transaction fees.

Conclusion

Whether your matter fits one of these fee structures or is a combination of the above, make sure you have a clear picture of how fees will be calculated and collected.

If you need help with any legal matter, please contact us.