Attorney Fees: Understanding The Basics
Educating yourself on the basics of attorney fees before you hire an attorney could help you prevent one of the most common misunderstandings between attorneys and their clients: the issue of money and payment.
5 Things You Need to Know About Attorney Fees
Most people who seek the assistance of an attorney who completely and wholly understands your legal issue. In other words, they work within that specific practice area. You also want an attorney who sets his or her fees at a reasonable amount, treats his or her clients with respect, and is reasonably available for contact. The following list provides a limited set of general rules you should consider when hiring an attorney.
1. Standard or flat rate fees are highly uncommon.
Attorneys will usually set a fee agreement that clients must either consent to or reject based on several factors. These factors can include, but are not limited to: the attorney’s overhead and/or reputation, the nature of the legal issue in question, and the rates for similar cases. While cases can be similarly priced, they will nonetheless have a standard fee for every similar case. Cases, for example, can be similar in terms of trademark research, eviction handling, bankruptcy filing, or perhaps the preparation of a living trust.
It is highly common that attorneys are recommended based on the quality of work provided and the fee they did the work for. Do not expect the same rate as the person who gave you the recommendation. Your case could be more or less complex than another client’s. Further, it is also common to find attorneys who have fewer fees in areas where there is an overflow of attorneys. The contrary is also true: fees can be higher in areas where the demand is low and the amount of attorneys is scarce.
2. Low-cost hourly fees are not always a good thing.
While you may want to save money, economically priced attorneys are not always the best option. This is especially true if your legal dilemma is highly complex or requires special knowledge and/or experience. A newly licensed attorney who has fees ranging from $100 per hour could result in higher costs than an experienced attorney who has fees ranging $300 an hour. While a newly licensed attorney may not determine the success of your case, pay attention to their fees. A low cost can also determine the attorney’s inability to be available at all times for your questions or concerns. It can also directly reflect their experience with certain types of cases, or just the law in general.
3. Higher fees do not necessitate success.
There is very little correlation between the fees an attorney charges and the success of the case, or the method in which the attorney handles the case. A pricey attorney might not necessarily charge based on the work provided. He or she, rather, might charge based on the location of his or her office and the overall image of his or her brand. They could also price rates higher in an effort to control their caseload. If you are unsure about investing in a higher priced attorney, consider the complexity of your legal issue. If you need to hire an attorney to draft a simple business contract, you will likely not need a high-level corporate attorney.
4. Make sure you understand how your attorney’s contingency fees work.
An attorney who offers his or her clients the option to handle the case based on a contingency fee will get paid only if the case is won. These fees are common in personal injury lawsuits. Some clients are surprised to find out that a portion of their compensation is subtracted to pay attorney fees. Also keep in mind that there are court costs and filing costs that are separate from your attorney’s portion of the award. Some attorneys will cover these costs or postpone them until the end of the trial. Some will not. If your attorney operates on contingency fees, make sure you understand all potential and variable fees that will come out of a final settlement or trial.
5. The issue with security interests.
There are attorneys who propose securing his or her right to collect legal fees with a client’s deed of trust or other property or assets. These forms of agreements are not legal in many states. Before signing your house away, check with your local state law to determine if this is acceptable. Also consider the worst case scenario: you lose your case, recover no damages or benefits, and you still owe your attorney.
Organizing a Written Fee Agreement Between Yourself and Your Attorney
Most disagreements between attorneys and clients happen over the issue of money. In order to prevent this issue, many states require a written fee agreement. This agreement determines the fees you will be obligated to pay, and it outlines the services the attorney is expected to carry out on your behalf. This agreement can be very useful in preventing issues with your attorney, but it is also a record of the agreed upon terms. This record can be beneficial in case there is a need to dispute the bill(s).
The attorney commonly drafts the written agreements. However upon reviewing the document, be sure it includes the following:
- Specified retainer fees.
Retainers are another way to say paying a deposit for the warranted services. A written agreement should declare the amount of the retainer and when payment is due.
- Hourly fees.
The written agreement should declare the hourly rate for all those who will work on your case. It should also include the frequency at which the attorney will bill you and how long you will have to make the payment. The written agreement should also include the best method to dispute a charge.
- Contingency fees.
If your case is based on a contingency fee, the attorney is set to take a percentage of your winnings, if your case ends in your favor. The written agreement must state the contingency percentage the attorney will take. It could include who is responsible for any other fees.
- Costs of the lawsuit.
It is highly important to understand that while an attorney may charge an hourly fee, you may need to pay other litigation costs. Some of these costs include:
- Court fees
- The costs of expert witnesses and expert investigators
- Document fees
- Traveling expenses
If an attorney is charging a contingency fee, he or she may require you to pay these types of costs upfront entirely. Or, your attorney may charge a part of it and charge the rest once your case has been won. Whether or not you win the case, you will need to cover these costs at the end of it. Many other attorneys will request their clients to pay for these costs as the cases progress.
Understand Your Rights: Establish All Attorney Fees Up Front
Avoid surprises when it comes to attorney fees. Understand local rules and regulations in the matter. If you have any questions, ask your attorney. A reputable attorney should always be willing to answer your questions to be sure you are comfortable before entering into a contract with him or her.