Litigation & Appeals Law
Do All Lawyers Use The Same Fee Agreements?
No. There are several kinds of fee agreements and most agreements between you and a lawyer must be in writing. Apart from any fee you may pay for your first meeting with a lawyer, you will typically be charged a fixed, hourly, retainer, contingency or statutory fee, which are explained more in detail below:
Fixed (standard) Fee: This fee arrangement is used most often by legal clinics and some law firms or lawyers for routine legal matters, like drawing up a simple will or handling an uncontested divorce. When you agree to a fixed fee, be sure that you know what it does and does not include. You also should find out if any other charges might be added later on.
Hourly Fee: Hourly fees can vary from lawyer to lawyer. To find out the approximate total of your bill, ask the lawyer to estimate how long your case will take. Just remember that circumstances may change, and your case may take longer to handle than the lawyer expected at the beginning.
Retainer Fee: A retainer fee can be used to guarantee that the lawyer will be readily available to work on your particular case, which could mean that he/she would have to turn down other cases in order to remain available for you. As a result, you will probably be billed at a higher rate for the legal work that is done. If the fee agreement states that the retainer is not refundable, you may not be able to get your money back, even if the lawyer does not handle your case or complete the work. Another way of working out the retainer fee agreement is to have the lawyer be “on call” to handle your legal problems over a period of time. Certain kinds of legal work would be covered by the retainer fee while other legal services would be billed separately. In some cases, a retainer fee is considered a “down payment” on any legal services that you will need. This means that the legal fees will be subtracted from the retainer until the retainer is used up. Then, the lawyer will either ask you to pay another retainer or bill you for the additional time spent on your case.
Contingency Fee: This kind of fee agreement is commonly used in personal injury, medical malpractice, workers’ compensation and other cases involving a law suit for money. It means that you will pay the lawyer a certain percentage of the money you receive if you win the case or if you settle it out of court. If you lose, the lawyer does not receive a fee. However, you will still have to pay any court costs and other expenses that are involved. Depending on the circumstances, these costs can be quite high. In some cases, the lawyer may use the money you receive from the case to pay some of these additional costs for you when they are due. Be sure your contingency agreement spells out the percentage the lawyer will get. Also, get an estimate of the court costs and other expenses, and find out whether the lawyer’s share is paid after the other expenses are deducted or before-it can make a big difference in the amount you receive from the settlement.
Statutory fee: For certain legal matters the cost is set by statute or law. This means the lawyer’s fee is either set or must be approved by the court.
When making fee agreements with your lawyer, don’t forget:
- All contingency fee agreements must be in writing. Among other things, they must state whether you are required to pay the lawyer for related matters that come up as a result of your case, which are not covered by the written fee agreement. Depending on your state’s laws, the agreement may also have to state that the attorney’s fee is not set by law but is worked out between the attorney and the client.
- Non-contingency fee arrangements must include the lawyer’s hourly rate, fixed fee or statutory fee and other standard rates, fees and charges that would apply to your case, as well as an explanation of the general nature of the services that the lawyer will provide for you.
- Sometimes it is impossible for a lawyer to know exactly how much time your case will take, so you should ask that an estimate of the costs and time involved to be included in the fee agreement. But, keep in mind that many unexpected factors may affect the lawyer’s fee and that the actual cost may be greater than the estimate.
- Tell your lawyer everything you know about your case. In the case of a law suit, be sure to let the lawyer know if the person you are suing is also suing you (cross complaint or counter suit). Cross complaints can affect the type and amount of the fee your lawyer will charge because they make your case more complicated.