Legal Fees and Expenses
Q. How can I be sure that my lawyer will not overcharge me?
A. The fee charged by a attorney should be reasonable from an objective point of view. The fee
should be tied to specific services rendered, time invested, and level of expertise provided.
There are some broad guidelines to help in evaluating whether a particular fee is
· the time and work required by the lawyer and any assistants, and the difficulty of the legal
· how much other lawyers in the area charge for similar work;
· the total value of the claim or settlement and the results of the case;
· whether the lawyer has worked for that client before;
· the lawyer’s experience, reputation, and ability; and
· the amount of other work the lawyer had to turn down to take on a particular case.
Sidebar: Talk About Fees
Although money is often a touchy subject in our society, fees and other charges should be
discussed with your lawyer early. You can avoid future problems by having a clear understanding
of the fees to be charged and getting that understanding in writing before any legal work has started. If the fee is to be charged on an hourly basis, insist on a complete itemized list and an
explanation of charges each time the lawyer bills you.
Legal advice is not cheap. A bill from a lawyer for preparing a one-page legal document or
providing basic advice may surprise some clients. Remember that when you hire a lawyer, you are
paying for his or her expertise and time.
Q. Someone said that I should ask my lawyer to use the billing method that is based on
contingent fees. What does this mean?
A. A client pays a contingent fees to a lawyer only if the lawyer handles a case successfully.
Lawyers and clients use this arrangement only in cases where money is being claimed–most often
in cases involving personal injury or workers’ compensation. Many states strictly forbid this billing
method in criminal cases and in most cases involving domestic (i.e., family) relations.
In a contingent fee arrangement, the lawyer agrees to accept a fixed percentage (often one
third) of the recovery, which is the amount finally paid to the client. If you win the case, the lawyer’s
fee comes out of the money awarded to you. If you lose, neither you nor the lawyer will get any
money, but you will not be required to pay your attorney for the work done on the case.
On the other hand, win or lose, you probably will have to pay court filing fees, the costs
related to deposing witnesses, and similar charges.
By entering into a contingent fee agreement, both you and your lawyer expect to collect
some unknown amount of money. Because many personal injury actions involve considerable and
often complicated investigation and work by a lawyer, this may be less expensive than paying an
hourly rate. You should clearly understand your options before entering into a contingency fee
agreement, which is a contract in itself.
Q. Are all contingent fee arrangements the same?
A. No. An important consideration is whether or not the lawyer deducts the costs and expenses
from the amount won before or after you pay the lawyer’s percentage.
Example: Joe hires Ernie Attorney to represent him, agreeing that Ernie will receive one third of
the final amount–in this case, $12,000. If Joe pays Ernie his fee before expenses, the fee will be
calculated as follows:
$12,000 Total amount recovered in case
-$4,000 One third for Ernie Attorney
-2,100 Payment for expenses and costs
$5,900 Amount that Joe recovers
If Joe pays Ernie after other legal expenses and costs, the fee will be calculated as follows:
$12,000 Total amount recovered in case
– 2,100 Payment for expenses and costs
-3,300 (One-third for Ernie Attorney)
$6,600 Amount that Joe recovers
The above figures show that Joe will collect an additional seven-hundred dollars if the agreement
provides that Ernie Attorney collects his share after Joe pays the other legal expenses.
Many lawyers prefer to be paid before they subtract the expenses, but the point is often
negotiable. Of course, these matters should be settled before you hire a lawyer. If you agree to pay
a contingent fee, your lawyer should provide a written explanation of this agreement that clearly
states how he or she will deduct costs.
Q. If my lawyer and I agree to a contingent fee arrangement, shouldn’t the method of
settling my case affect the amount of my lawyer’s fee?
A. Yes, but only if both of you agree beforehand. Lawyers settle most personal injury cases
through negotiations with insurance companies; such cases rarely require a trial in court. If the
lawyer settles the case before going to trial, this requires less legal work. You can try to negotiate
an agreement in which the lawyer accepts a lower percentage if he or she settles the case easily and
quickly or before a lawsuit is filed in court, though many good lawyers might not agree to those
Q. What billing method do most lawyers use?
A. The most common billing method is to charge a set amount for each hour of time the lawyer
works on your case. The method for determining what is a “reasonable” hourly fee depends on
several things. More experienced lawyers tend to charge more per hour than those with less
experience–but they also may take less time to do the same legal work. In addition, the same
lawyer will usually charge more for time spent in the courtroom than for hours spent in the office or
Sidebar: Types of Fees and Expenses
The method used to charge fees is one of the things to consider in deciding if a fee is reasonable.
You should understand the different charging methods before you make any hiring decision. At
your first meeting, the lawyer should estimate how much the total case will cost and inform you of
the method he or she will use to charge for the work. As with any bill, you should not pay without
first getting an explanation for any charges you do not understand. Remember, not all costs can be
estimated exactly because of unforeseen developments during the course of your case.
Q. A friend suggested that I might want to have a lawyer “on retainer.” What does this
A. A retainer fee is a set amount of money paid regularly to make sure that a lawyer will be
available for any necessary legal service you might require. Businesses and people who routinely
have a lot of legal work use retainers. By paying a retainer, a client receives routine consultations
and general legal advice whenever needed. If a legal matter requires courtroom time or many hours
of work, the client may need to pay more than the retainer amount. Retainer agreements should
always be in writing.
Most people do not see a lawyer regularly and do not need to pay a retainer fee.
Sometimes, however, a lawyer will ask the client to pay some money in advance before any legal
work will be done. Although often called a “retainer,” this money is really a down payment that will
be applied toward the total fee billed.
Q. I saw an advertisement from a law firm that charges fixed fees for specific types of
work. What does this involve?
A. A fixed fee is the amount that will be charged for routine legal work. In a few situations, this
amount may be set by law or by the judge handling the case. Since advertising by lawyers is
becoming more popular, you are likely to see ads offering: “Simple Divorce–$150” or
“Bankruptcy–from $50.” Do not assume that these prices will be the amount of your final bill. The
advertised price often does not include court costs and other expenses.
Q. Does the lawyer’s billing method influence the other costs and expenses that I might
have to pay?
A. No. Some costs and expenses will be charged regardless of the billing method. The court
clerk’s office charges a fee for filing the complaint or petition that begins a legal action. The sheriff’s
office charges a fee for serving a legal summons. Your lawyer must pay for postage, copying
documents, telephone calls, and the advice or testimony of some types of expert witnesses such as
doctors. These expenses, often called “costs,” may not be part of a legal fee, and you may have to
pay them regardless of the fee arrangement you use. Your lawyer will usually pay these costs as
needed, billing you at regular intervals or at the close of your case.
Q. What are referral fees?
A. If you go to “Lawyer A,” he or she may be unable to help but refers you instead to “Lawyer B,”
at another law firm, who has more experience in handling your kind of case. In return for the
referral, Lawyer A will sometimes ask to be paid part of the total fee arrangement you pay to
Lawyer B. The law may prohibit this type of fee, especially if it increases the final amount to be
paid by a client. The ethical rules for lawyers in most states specify that two lawyers may not divide
a client’s fee unless:
1. the client knows about the arrangement;
2. both lawyers do some actual “work” on the case;
3. they divide the fee to show how much work each lawyer did; and
4. the total bill is reasonable.
If one lawyer refers you to another, ask whether there will be a referral fee and, if so, ask
about the specifics of the agreement between the lawyers.
Q. Should I “shop around” for the cheapest lawyer I can find?
A. With legal advice, as with other products and services, you often get what you pay for.
Although you should not expect to get good legal advice without paying for it, you should not pay
for anything that you don’t actually receive. After you and your lawyer have discussed fees, make
sure to follow through by examining each bill carefully. If you feel that any charge is too high or if
you do not understand a billed item, ask your lawyer to explain it before you pay.
Q. Is there anything I can do to reduce my legal costs?
A. Yes, there are several cost-cutting methods available to you. First, answer all your lawyer’s
questions fully and honestly. Not only will you feel better but you also will save on legal fees. If you
tell your lawyer all the facts as you know them, it will save time that might be spent on the particular
case and will help your lawyer do a better job.Remember that the ethics of the profession bind your lawyer to maintain in the strictest confidence almost anything you reveal during your private discussions. You should feel free to tell your lawyer the complete details in your case, even those that embarrass you. It is particularly important to tell your lawyer facts about your case that reflect poorly on you. These will almost certainly come out if your case goes to trial.
Q. Should I wait for my lawyer to say what he or she needs from me?
A. No, some things should be obvious to you. Before the first meeting with your lawyer, think
about your legal problem and how you would like it resolved. If your case involves other people,
write down their names, addresses, and telephone numbers. Also jot down any specific facts or
dates you think might be important and any questions you want answered. Bring the information
with you to the first meeting, along with any relevant documents such as contracts or leases. By
being organized, you will save time and money.
Q. If something related to my case has occurred, should I wait until my next scheduled
meeting to tell my lawyer about it?
A. No, situations can vary from one day to the next. Tell your lawyer immediately of changes that
might be important to your case. It might mean that the lawyer will have to take a totally different
action–or no action at all–in your case. This could greatly affect your lawyer’s fee.
Q. Can I reduce my legal costs if I get more involved in my case?
A. Sometimes. Stay informed and ask for copies of important documents related to your case. Let
your lawyer know if you are willing to help out, such as by picking up or delivering documents or
by making a few telephone calls. You should not interfere with your lawyer’s work. However, you
might be able to move your case quicker, reduce your legal costs, and keep yourself better
informed by doing some of the work yourself. Discuss this with your lawyer.
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