Attorneys and clients may structure the attorney fees in various ways. The most common are:
1. Hourly fee;
2. Fixed or flat fee;
3. Contingency fee;
4. Hybrid fee (that is, a combination of 1, 2, or 3 above).
Attorney-Client agreements may be anywhere from one to ten pages or more. They contain many terms, conditions, and provisions. If you don't understand any part of the agreement, ask the lawyer to explain it. This article briefly discusses the FEE provision of such agreements.
HOURLY FEES frequently range from $175 to $750 per hour. The rates vary from attorney to attorney and from law firm to law firm. Factors: Experience, knowledge, and skill of the attorney or firm, the type of case, and other factors.
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Hourly fees are usually charged in minimum increments per the agreement. A lawyer may bill in minimal 6-minute (or 0.1/hour) increments. Some bill minimum 0.2 (7-12 minutes) or even 0.3 (13-18 minutes) increments. Thus, a 1 minute talk on the telephone could for example cost you 0.2/hour x $300 per hour = $60, that is, more than the actual time spent. I believe that the 0.1/hour minimal increment standard is the most fair. Some attorneys do not, in certain instances, bill a quick call or a brief email even though they can per the fee agreement.
FIXED OR FLAT FEE arrangements are a set amount of fees for an agreed set of tasks. Such fees are set based on the skill, knowledge and experience required to handle the matter, and the range of time likely to be required. The fee is sometimes required to be paid up front depending on the type of case.
CONTINGENCY FEES are fees whereby the attorney receives a percentage of the amount recovered regarding your legal claim. The fee may range, in general, from 25% to 40% of the gross recovery. Less frequently, the percentage will be calculated from the net recovery after costs and unpaid medical expenses are first deducted. Attorneys who accept contingency fees typically prefer cases where: (a) liability or fault of the wrongdoer appears clear or strong, (b) the wrongdoer has insurance to or adequate assets cover the loss, as well as (c) adequate damages so that the recovery is sufficient to compensate both the client and attorney.
HYBRID FEE arrangement are less frequent but sometimes used. Classically, hybrid fee agreements combine a reduced hourly rate plus a reduced contingency percentage (Example: $150 per hour plus a 15% contingency). Sometimes this agreement is practical where the client can afford to pay some but not all of the hourly fees, and the case has a possibility (but not as strong of a probability) of recovery at the case's conclusion.
COSTS: Costs are charges in addition to attorney's fees. Examples of common costs include: court filing fees, deposition costs, private investigators, expert witness costs, and, depending on the agreement, minor costs such as faxes, photocopies, and postage. In contingency fee cases, many lawyers will advance all or some of the costs (i.e. pay costs up front), and will be repaid or reimbursed when the case concludes. Sometimes, with fixed fee services, all of the costs are built in the fixed fee. Always read the contract to determine what costs you will be charged for and whether or not the attorney will advance some or all of the costs.
SUMMARY: The way the lawyer fees are structured may vary depending on the type of case, the client's ability to pay the fees, and other factors. Sometimes, some attorneys are willing to modify the terms of an agreement including the manner, rate, and/or amount in which the fees are paid.
Quite commonly, for example, personal injury and wrongful termination employment claims are handled on a contingency fee, bankruptcy and criminal cases on a fixed fee for an agreed set of tasks, and civil litigation defense cases on an hourly rate.
Whatever the type of case, read the attorney-client agreement and, furthermore, ask the lawyer to explain the terms to you before you sign the agreement.
Disclaimer and Notice: The materials in article have been prepared for general information purposes only and do not constitute legal advice.
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