Attorney's Fees and The Clients That Pay Them
A lawyer's time and advice are his stock in trade. - Abraham Lincoln
So you've met with the attorney, decided that he is the one for you, and your palms are starting to sweat as you get to the inevitable question that you knew you would have to ask..."So how much is this going to cost me?"
Ah, you have most certainly opened up Pandora's box on this one. The answer you get will vary depending on the city you live in, the attorney you are sitting in front of, his experience level, his caseload, the complexity of your case, the attorney on the other side of the case, whether you are in state or federal court, whether Jupiter is in conjunction with Saturn, and a whole host of other factors too numerous to mention here. Suffice it to say, a lot goes into how an attorney sets his fees.
First thing to do is wipe your palms. Every attorney expects this question and has no problem answering it. Don't worry, you won't offend her. And every attorney knows that the fee that is quoted will be acceptable to the client or it won't. That's just the nature of the business. No harm no foul, no hard feelings. If you like the fee then it looks like you are about to have a long and beautiful relationship, like Bogart and that French military guy in Casablanca.
If you don't like the quoted fee then you will lie and tell her you "need to think about it" and you will leave as fast as you can without looking like you are leaving as fast as you can. Again, no harm no foul and no hard feelings.
The vast majority of attorney fees fall into one of three types: 1) flat fees; 2) hourly fees; or 3) contingent fees. A flat fee means that you pay the fee and the attorney will do the work for that fee. Simple as that. If the flat fee is $1,000.00 then that is what you owe. If it takes the lawyer an hour to do the work then what do you owe him? $1,000.00. If it takes the lawyer 15 hours to do the work then what do you owe him? $1,000.00. The flat fee is very common with attorneys that do estate planning/wills, contracts for businesses, bankruptcies, uncontested divorces, and the like. These are matters that the attorney can estimate how much work will be involved, and therefore can offer the service at a fixed rate. Clients usually like the flat fee because they know exactly what their bill will be from the outset.
One caveat on divorce cases. Many times clients think that their divorce is uncontested, but it turns out that its not. At that point, the attorney may advise the client that their divorce is now a contested matter and there will be additional fees. If you have a written contract with your attorney it should spell out what the fee will be if the matter becomes contested. Normally your case will be converted from a flat fee to an hourly fee.
Hourly fees are just that - the attorney bills for the time he spends on your case. Most attorneys will bill in increments of a tenth of an hour. So if something takes 6 minutes (1/10 of an hour) to do then you will see a ".1" on your bill with a corresponding hourly rate. If something takes the attorney 4 minutes then you will see a ".1" on your bill with a corresponding hourly rate. If something takes the attorney 2 minutes then you will see a ".1" on your bill with a corresponding hourly rate. Get the picture? "Wait", you say, "why is he billing me for 6 minutes when he only did 2 minutes of work?" The answer is that attorneys do not bill (at least I have never seen one) for less than 1/10 of an hour. That is the minimum standard increment of time that I have seen in the legal field.
Truth be told, most attorneys do not even take the time to bill for something that takes only a minute or two. HOWEVER, if your attorney is billing for everything that she does, even the one-minute stuff, then that is her prerogative. If you don't like it then ask her about it.
Clients can also help themselves more than they know on hourly fees. Do you really need to make a phone call or send an email and ask about the status of your case? Or can those things wait? Do you really need to ask that question RIGHT NOW THIS VERY SECOND? Or can it go on your list of questions to ask your attorney when you meet with him next time? Are there documents that you can collect yourself and save your attorney some time (and therefore save you some attorney's fees)?
How about creating a timeline of events for your attorney to help him get a better handle on your case? This is almost always extremely helpful. Even if your attorney was taking good notes during your initial consultation, a client's timeline is very handy to have in the file.
While you're at it, start a list of witnesses that you think will be helpful for your case. Be sure and include addresses, phone numbers, email addresses if you have them, and a sentence or two about what this person knows about your case. Not sure whether to include a person on your witness list or not? Put him/her on there. Your attorney will decide if you need him/her or not.
So your case is finally over and you have paid your final bill from your attorney. But you still have a question or two over the next few weeks. Will you be billed for calling your attorney and asking those questions? Let me ask it a different way - why would you not be billed for the time it takes your attorney to answer those questions? This is additional work on your case. It is legal advice. It is billable. Will your attorney bill you for it? I have no idea.
A good rule of thumb for after your case is finished - if you call with a quick question and answer session (2 minutes) then I doubt you get a bill. If you call for a quick question and answer session (2 minutes) three or four times over a three week period, don't be surprised to get a bill.
And then there is the contingent fee. This is the "no win no fee" fee. But what does that mean? A contingent fee means that the attorney's fee is contingent on whether there is a recovery for the client or not. Most contingent fees range from 25% to 50% depending on many of the factors outlined at the outset of this article. So, if you win or settle your case for $10,000.00, and your attorney's percentage is 1/3, then the amount you will owe your attorney for his fees will be $3,333.33. Is this the TOTAL amount you will owe your attorney? Most likely not. There are usually expenses involved in your case that may have been paid by your attorney - court filing fees, deposition costs, expert witness fees, copies, postage, etc. These items may or may not be charged to you, but most of the time they will be. If you are in the process of settling your case, then your discussions with your attorney should include a discussion of what is owed to the attorney for costs.
So, you've wiped your palms and you begin the discussion with your attorney about fees. You are going to know your situation rather easily if you are quoted a flat fee or a contingent fee. This is because you will know what your bill will be in the flat fee situation OR if you win your case in the contingent fee situation then your attorney's fee will be paid out of your award/settlement money. If you lose your case in the contingent fee situation then you will know that you will not owe your attorney a fee. However, you might be charged for the costs incurred by your attorney so be sure and discuss this with her up front.
What if your attorney quotes you an hourly fee? You think to yourself "Self, how many hours is this guy going to spend on my case?" Well self, you need to ask him. Most experienced attorneys can give you an estimate of how much time will be spent on your case, and therefore how much your fees are going to be. But understand that many times your fees will depend upon several factors that develop throughout the course of your case. Even so, your attorney should be able to give you an approximate range (low end and high end) of what your fees will ultimately be given the normal course of events in a typical contested case. Remember that fees are different from costs. Costs for expert witnesses, depositions, and other things will most likely add to your bill. If these are likely in your case then ask your attorney about them and how they will be paid.
Can you get the other side to pay your attorney's fees? Good question. Ask your attorney because the answer will be different for every case. Understand that just because you can ask for your attorney's fees does not mean you are going to get your attorney's fees paid by the other side. Many times this decision is left to the discretion of the judge. But your attorney should know this and should be able to give you an idea of your chances on this question.
Is my retainer refundable? Another good question. And again the answer will vary by attorney. Some retainers are non-refundable which means that once you pay it then you are not going to see that money again. Other retainers are paid, and if a portion of the retainer is still unused at the conclusion of the case then that unused portion is returned to the client. Be sure to read your contract you have with your attorney and ask if you have questions about whether the retainer is refundable or not. If the contract has language along the lines of "this retainer is deemed earned when paid" then that is a pretty good hint that your retainer is non-refundable. But again, always ask if you have doubts about it.