Negotiating Attorney’s Flat Fee and Hourly Services
When you are considering hiring an attorney, the attorney’s fees should be part of your decision-making process. When you meet with an attorney, you should discuss the attorney’s fees and be prepared to negotiate the terms of the fee structure.
Whether the attorney bills his or her fees as a flat rate, hourly, or an a contingent fee basis, there is usually room to reduce the fee and save yourself money. However, some good attorneys may not be willing to reduce their fees. While quality attorneys may charge more for their services, they will often get you a larger settlement or trial award than someone else. Some attorneys are worth the higher fees.
1 Understand the difference between a flat fee and an hourly rate. Two of the ways that attorneys bill for certain types of cases are by a flat fee or an hourly rate. Generally, a flat or fixed fee is charged for routine legal work, such as drafting a simple will. Criminal lawyers may also charge flat fees for routine cases (e.g., expungements).
You will see flat fees for criminal cases because it is often hard to get paid once a client goes to jail. With an hourly rate, an attorney charges you for every hour or portion of an hour that the attorney or other staff members work on the case. Attorneys who handle divorce cases may charge an hourly rate.
?? When retaining an attorney for an advertised flat fee, you should be aware that the advertised flat fee may not include all of the expenses associated with the case.
?? Hourly rates may vary based on your location, the difficulty of your case, or whether you choose a solo practitioner or a large law firm.
2 Compare flat fee rates. When choosing an attorney to represent you in a routine legal case for a fixed fee, it is important that you contact other attorneys in the area and identify the rate that they charge for the same legal work. By identifying the acceptable fee range for legal services, you are in a better position to negotiate a reduced fee from an attorney that charges more than his or her competitors.
3Meet with the attorney and discuss fees. For many attorneys, you will not get a good sense of their hourly fee structure until you meet with them to discuss your case. As part of your initial interview with the attorney, when you are discussing fees, costs, and billing, consider asking the following:
??What does it typically cost to handle a case like mine?
??What are the factors that could make the case cost more or less?
?? Are you able to outline a budget that explains the legal fees and costs for the first 6 months that you handle my case?
?? How do you bill for correspondence and legal research?
?? Will you be able to explain the costs in the case to me and tell me how they benefitted my case?
?? Will the attorney take property in lieu of cash? A lot of attorneys are willing to accept property (e.g., artwork or even homes) instead of cash. If you are strapped for cash but have valuable property, you might offer the property as payment.
4 Ask what is included in the hourly rate. For most cases, the lead attorney will only handle certain aspects of the case. For example, an attorney should not be making his or her own photocopies and billing you at the higher attorney rate. You should ask the attorney who else will be working on your case and at what rate each person bills.
?? Ask your attorney whether his or her time is billed differently for trial work versus preparation. Some attorneys charge a higher hourly rate for court appearances. It is important to fully discuss the range of fees that the attorney may charge for handling your case.
?? Ask the attorney to identify the type of work that is typically handled by people in the office other than the attorney.
?? Ask the attorney how much experience they have handling your case. While a more experienced attorney may charge a higher hourly rate, he or she may be able to conclude your case more quickly.
?? Ask to provide your own fees upfront. Oftentimes, attorneys will charge higher rates if they have to pay for court and expert fees on your behalf. If you are willing to pay these fees yourself, you may be able to negotiate a smaller hourly fee.
5 Inquire about how you can assist the attorney. Depending on the type of case, there are things that you can do that may reduce your overall costs. For example, rather than have a paralegal or legal secretary request medical records and then bill you for that task, you can request the records yourself.
?? You can also reduce the costs of your case by being completely honest with your attorney about all of the facts in your case. This helps the attorney better prepare your case and not waste time responding to issues to which he or she was unaware.
6 Negotiate cost cutting arrangements. Depending on your case or need for legal services, you may be able to negotiate a number of cost saving fee agreements. For example, you can negotiate the intervals at which an attorney bills, specify that certain aspects of the case be handled for a fixed fee rather than an hourly rate, and you can limit the number of hours that an attorney can work on your case.
?? If you are negotiating an hourly fee agreement, you can ask that the attorney bill at 6 minute intervals rather than the more standard 15 minute intervals.
?? By establishing a 6-minute billing interval, an attorney who makes a 5-minute phone call does not get to bill for 15 minutes, or 1/4th of the attorney’s hourly rate.
?? A second cost saving technique is to negotiate certain fees at a fixed rate and others at an hourly rate. For example, if you are going through a divorce your attorney may handle the divorce on an hourly rate but draft your new will at a fixed rate.
?? If you hire a law firm or an attorney for a project, you can negotiate the total amount of hours that the law firm can bill you to work for the completed work.
7 Review your retainer agreement closely. Once you and your attorney have agreed upon a fee structure, all of the information will be contained in a retainer agreement. This document acts as a contract for payment and services between you and your attorney. Before you sign your retainer agreement, consider the following:
?? Does it contain all of the fee-related agreements that you made during your negotiation?
?? Does it state how often you are billed?
?? Does is specify the increments at which a lawyer calculates his or her time (6 minutes versus 15 minutes)?
?? Does it state whether people other than the attorney will work on your case and at what rate they will bill?