Befuddled by Legal Fees? Here are 6 Common Fee Arrangements Explained.
Your legal issue may be complicated and uncover surprises along the way, but there is no reason your legal fees should catch you off guard. Firstly, it is important to understand that attorneys bill for their services in different ways. You should discuss the various fee arrangements up front during your initial consultation.
Most attorneys offer a free initial consultation to prospective clients. Use this opportunity to obtain valuable information about the merits of your case, the attorneys experience with your case type, and how fees or payments are assessed.
Common types of fee arrangements used by attorneys include:
- Contingency Fees: In this arrangement, the lawyer agrees to accept a fixed percentage (often one third) of the amount ultimately rewarded to the client. If you win your case, your attorney’s fee comes out of the money awarded to you.
- Flat Fees: A lawyer charges a specific, fixed rate. A flat fee is typically applies to relatively simple or routine cases, such as a will or an uncontested divorce.
- Hourly Fees: This is the most common fee arrangement. If a lawyer’s fee is $100 per hour and he works 3 hours, the fee will be $300. Hourly rates vary depending upon experience, reputation, and firm size
- Statutory Fees: In some cases fees are set by statute or a court. These types of fees typically apply to probate, bankruptcy, or other related proceedings.
How much can you expect to pay?
During your initial consultation, it’s important to discuss how much your attorney will charge you and how much time he/she will spend working on your case. Many personal injury attorneys work “on contingency,” meaning they get paid only if you win your case. However, there are often reimbursements required for out-of-pocket costs.
Legal fees will vary based on factors including:
- Experience or reputation of the attorney, and the
- Nature and facts of the case.
Hour rates can actually vary anywhere from $50/hour to $1,000/hr or more.
The average rate for experienced attorneys in rural areas or small towns ranges between $100 and $200 per hour. In major metropolitan areas, the average rate jumps to $200 to $600 per hour. Attorneys who specialize in specific areas may charge more.
- Support Staff: Other fees that factor in may include paralegals and other support staff, who are typically billed out between $25 and $50 per hour. These staff members assist with research, managing documents and communication between all parties and the court.
- Retainer Fee: Paying an attorney on retainer may be another option available. This can be applied in one of two ways: 1) as a down payment against which future costs are billed, and 2) having a lawyer “on call” who will handle legal problems over a period of time or as they occur. The fee is usually based on the lawyer’s hourly rate and placed in a special account where deductions are made as costs accrue. Ask if your lawyer’s retainer fee is refundable under any circumstance.
Are you ready for the next step?
Regardless of the nature of your case, it never hurts to get a free consultation. Lawyers have experience with your type of case and are knowledgeable of applicable local laws. They can help assess the merits of your case, protect your legal rights, and get seek fair compensation.
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For additional information, see “Essential Questions to Ask Before Hiring a Lawyer.”