Considering Attorney’s Costs
1 Understand how attorneys charge for their services. Typically, there are three major ways that attorneys bill for their services: a flat fee, a contingency fee or hourly fees.
?? An attorney charging a flat fee will charge one fee (sometimes upfront) for handling an entire matter, regardless of how many hours the matter takes. Some examples of cases that are commonly handled using a flat fee are criminal cases, bankruptcy cases, domestic relations cases (such as divorce or custody matters), and document drafting, such as drafting a will or a trust document.
?? An attorney charging a contingency fee does not collect legal fees from the client unless the attorney recovers money for the client, either through a settlement or a trial. The attorney will receive a percentage of the settlement amount, usually between 30 to 40 percent. Some examples of cases that are commonly handled on a contingency fee basis are personal injury cases, employment discrimination cases, and other types of cases where a large recovery from a corporation or business is expected.
?? Lawyers charging an hourly rate “bill” hours and then charge the client for the amount of hours worked on the client’s matter. Usually, hourly rates are used by businesses and corporations who may be involved in litigation. Additionally, individuals may be charged hourly rates for long or complicated litigation.
2 Negotiate a fee. Budget what you are able to spend, and ask if the attorney will be able to handle your case for the amount you budgeted. Additionally, you should make sure to tell your attorney that he or she should inform you before doing anything on your case that takes it out of budget.
?? Keep in mind that even with a strict budget, if your case becomes significantly more complicated or takes significantly longer than the attorney originally anticipated, you may need to pay more in legal fees.
?? If you cannot afford the attorney’s fees upfront, ask about potential arrangements such as payment plans. Many attorneys are willing to work with you base on your financial needs.
?? There are several ways that attorneys can help those on moderate or low incomes find legal counsel. Many firms offer “sliding fees” based on your income, so that you pay however much your income level allows. You can sometimes even pay in barter, by trading goods or services (e.g., web design, gardening) for legal counsel. This is up to the individual attorney.
3 Execute an engagement letter or retainer. Your attorney will provide you with an engagement letter or retainer. This is a contract between you and your attorney that defines the nature of the legal engagement you are involved in, and the conditions and terms of your agreement with your attorney.
?? These conditions should include the expenses you are responsible for, the rate the attorney will be charging and the minimum billable increment. Note: the minimum billable increment should be six minutes, not 15 minutes.
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