Attorneys arrange payments with clients in a variety of ways. The cost of an attorney fees can vary substantially, but should be in all circumstances, reasonable.
The following information explains the different pay arrangements attorneys use most often. Most state bar associations recommend that attorney fees should be confirmed in a written agreement. Most states have developed procedures for resolving disputes that arise between the client and the attorney over attorney fees.
Different Types of Fees: Contingency Fees
A contingency fee represents a certain percentage of the recovery in the client's case. Contingency fees cannot be used in divorce cases, child custody cases and criminal cases. Many attorneys will take certain types of civil suits, such as personal injury cases on a contingency fee basis, where they do not charge a fee unless they recover money for the client. There are additional legal costs involved in litigation. Ordinarily the client repays those costs even if there is no monetary recovery.
Contingency fee percentages vary from case to case. Common contingent fees range from 20 to 40 percent of the client's recovery. Almost every state limits contingent fees for personal injury and workers' compensation cases. The law does not place a limit on contingency fee percentages for other cases, in which the figure is negotiable between the client and attorney. Contingency fee agreements must be in writing.
A flat fee is a dollar amount that the attorney and the client agree on before the attorney begins work. Many attorneys favor the flat fee because it is a simple transaction paid up front. The attorney identifies an amount of work that the case will require and calculates a
reasonable fee based on the time and effort involved. If the attorney spends less time on the case than anticipated, he may keep the excess fee amount, unless he and client agree otherwise. However, if the attorney charges a flat fee and the case requires more time and effort than originally anticipated, the attorney may not later demand more
An hourly rate is a predetermined pay for the attorney's work. The attorney and client may agree that these fees be paid periodically or in one lump sum at the end of the case. The time that an attorney charges for legal work is called billable time or billable hours.
Hourly rates vary according to the attorney's expertise and experience. Some critics have argued that hourly rates discourage quick work and expedited resolutions. Before agreeing to payment of an hourly rate, prospective clients should ask for a written estimate
of the number of billable hours that the attorney anticipates will be necessary for the case.
A retainer is either a continuing flat fee or an advance on the fee owed for the attorney's services. Corporations and wealthy individuals usually use a continuing flat fee retainer. In return for a regular payment, the attorney agrees to be available to handle the client's
day-to-day legal affairs. Most individuals do not have enough legal concerns to keep an attorney on retainer.
The term retainer also refers to an initial fee paid by the client. Attorneys who charge an hourly rate usually use retainers, but some attorneys add an initial retainer to a contingent fee.
Most attorneys will periodically take cases on a "pro bono" or "no fee" basis, particularly where the case is of interest to the attorney, and the issue involved in the case is significant to the public interest. Attorneys do receive many requests for pro bono work, and can at best
take only a few of those cases.
("Pro bono" is an abbreviation for "pro bono publico," meaning "for the public good." While it is customary for attorneys to do their "pro bono" work without charging a fee to the client, "pro bono" work may nevertheless result in fees, for example if the representation allows the attorney to ask for attorney fees as part of the judgment.)
Attorney Liane Galardi received her Juris Doctorate from Temple Law School in Philadelphia. She is licensed to practice law in both Pennsylvania and New Jersey. She is the Director of the Consult with the Attorney Program for LawInfo.com, Inc.
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