How do lawyers compute their fees?
Most lawyers charge an hourly rate for their services. My hourly rate is $450.00 per hour for work carried out on your file. However, there are other types of fees, including ‘fixed’ or ‘flat fees’ for a particular service, and there are also contingent fees. The fee can vary depending upon the circumstances of the case and the experience of the lawyer. A lawyer must consider a number of elements in computing a fee:
(1) Amount of time the lawyer spends doing work for you
lawyer actually spends working on your case, including research, writing, and phone calls made to discuss your legal matter. Many lawyers will charge a separate hourly rate for work performed by the lawyer’s staff.
(2) Ability, experience and reputation
are natural considerations in setting a fee. You should expect to pay a higher hourly rate for a lawyer whose expertise in a specific area of the law is in demand.
(3) The results achieved,
in some circumstances, maybe an element in deciding your fee. The ‘contingent fee’ arrangement is an example. This is an arrangement often used in personal injury or collection cases where the lawyer receives no fee unless he or she recovers money for the client. If money is recovered, then the lawyer receives a percentage of the recovery agreed upon at the time the lawyer begins representing the client. The percentage is based on a number of factors including the type of case and the stage at which the case is resolved. The client must, however, be responsible for court costs, such as filing fees and depositions, and must reimburse the lawyer for any out of pocket expenses incurred by the lawyer, such as for expert witnesses or document production. Contingent fee arrangements are not permitted in domestic relations cases and criminal matters.
When should you discuss fees?
At the very first interview. The lawyer may not be able to forecast the exact amount of time and effort required but will be able to give you an estimate based upon past experience. Often, neither the lawyer nor the client can tell at first how much work will be involved or what result will be determined. You should not hesitate to discuss fees at any time during the handling of your legal matter or even after you receive your statement.
Who is responsible for the fee?
You are the client and must pay the fee and expenses. In some cases that go to court, a judge may award a partial or full fee to be paid by the other side, but this does not release you from the obligation to pay your lawyer. Some fee judgments are not collectible and others cover only a part of the services rendered.
When do you pay?
Most lawyers require a retainer fee, or advance deposit, to apply against expenses and fees that are incurred. You should expect to pay this when you ask your lawyer to represent you. In hourly fee cases, you should ask the lawyer for a monthly billing with an itemized account of services performed and expenses paid. Any questions you have about the billing should be made as you receive the monthly statements. A contingent fee case is billed upon completion of the case, except for expenses that must be paid as they are incurred. The money that you pay to your lawyer in advance is deposited into the lawyer’s trust account and is held there safely until withdrawn for fees or until requested to be withdrawn by the client.
How can you minimize the amount of your legal fees?
Write down the names, addresses and telephone numbers of all persons involved and all facts you can recall that pertain to the case. Doing this yourself will cut down on the time the lawyer will have to spend gathering the information. Take any papers relating to the case to the first interview; Be as brief as possible in all interviews with the lawyer; Do not allow emotion to color the facts given; be as accurate as you can; Make full and honest disclosure to the lawyer of all the facts…good or bad. The lawyer will keep all facts in the strictest confidence; and Avoid unnecessary telephone calls to the lawyer. Write down the names, addresses, and telephone numbers of all persons involved and all facts you can recall that pertain to the case. Doing this yourself will cut down on the time the lawyer will have to spend gathering the information. Take any papers relating to the case to the first interview; Be as brief as possible in all interviews with the lawyer; Do not allow emotion to color the facts given; be as accurate as you can; Make full and honest disclosure to the lawyer of all the facts…good or bad. The lawyer will keep all facts in the strictest confidence; and Avoid unnecessary telephone calls to the lawyer. You should consider the financial advantages or disadvantages of a proposed legal action by discussing it with the lawyer. For example, would the court costs and legal fees be more than the amount of bad debt you would like to recover? Get legal advice before signing documents or taking legal action, and then follow the advice of the lawyer.
A significant part of looking after your file involves disbursements. A disbursement is an expense incurred by your lawyer for anything from office supplies and expenses (photocopying, printing costs, telephone calls) to travel expenses incurred in the process of handling your case. A common disbursement is also court filing fees that are paid on your behalf in order to bring or defend an action or to move the case forward in some way.