Though they may perform similar jobs, attorneys charge different types of fees. The fee agreements signed by clients significantly affect how much they pay for legal services. Attorney’s fees may depend on several factors, such as the lawyer’s ability and experience, how much time is spent on a case, and the difficulty — and results — of a case.

Understanding the different types of fees allows you to make well-informed decisions. The projected cost difference between two attorneys may even be the deciding factor in your choice.

Consultation Fee

Lawyers use consultations to learn about clients’ situations and determine if they can help. Clients use this time to get to know the attorneys, ask questions, and decide if the attorney is a match for their needs.

So, what do lawyers charge for a consultation? Well, they may not charge for one at all.

Many lawyers, especially in personal injury cases, do not charge an initial consultation fee. Before meeting with any new attorney, make sure to verify whether they charge a consultation fee.

Contingency Fee

When clients agree to pay a contingency fee, they agree to give their attorneys a percentage of the compensation they receive from a settlement or trial verdict.

It’s common for personal injury lawyers to charge between 30 and 40 percent. The higher contingency fees, of course, are often associated with those claims that go to trial.

Upon receiving the awarded amount, attorneys deduct the contingency and expenses from the recovered amount. It is expensive to manage cases, especially cases that go to trial. The attorney fees may be covering costs such as:

• Court reporters
• Depositions
• Expert witnesses
• Filing legal documents
• Making photocopies
• Trial preparation
• Office staff

Note that when a lawyer works on contingency, you only pay a fee if you recover compensation, either in a settlement or trial.

However, you might still be responsible for paying some of the applicable expenses listed above if you agreed to do so in your representation agreement. Make sure you ask questions before signing if you don’t fully understand the contingency arrangement.

Flat Fee and Alternative Fee Arrangements

A flat or fixed fee is a specific dollar amount that a client pays for legal services. Some attorneys use flat fees for relatively simple, routine legal issues. However, it is becoming more common for personal injury attorneys to use flat fees or alternative fee arrangements in order to meet the needs of the client in certain circumstances. Lawyers can typically predict how much time they will spend on these types of cases, so they are able to set a specific price for their services.

Alternative fee arrangements could include a cap on the fee paid to the attorney, a reduced rate depending on the recovery awarded, hourly rate for certain aspects of the case or any other agreement the attorney and client reach after discussion. Some attorneys switch between flat fees and hourly rates for certain services. Additionally, flat-fee and alternative fee agreements don’t always include court and office expenses so it is important to understand what the fee covers and what costs may be additional.

Referral Fee

Referral fees are those fees paid to the person or firm referring the case to the personal injury attorney. It could be a set dollar amount or a percentage of recovery. Each state handles this issue differently. Several state codes of professional responsibility prohibit referral fees unless the fee agreements meet specific criteria. Others are more open to the practice of referral fees.