Do you need a lawyer? Have you suffered an injury or loss or become entangled in a legal dispute? You’re probably worried about the potential cost of legal representation. Choosing a lawyer can feel overwhelming. A lawyer may charge based on the type of case, the lawyer’s experience, and your geographic location. According to the Florida Bar’s most recent Economics and Law Office Management Survey, the median hourly rate for a Florida attorney is $300.
While paying this hourly rate may feel out of reach, many attorneys offer payment agreements that can make their services affordable. In fact, personal injury lawyers don’t charge their clients directly, but only collect a percentage of any settlement or judgment they help to obtain.
Read on for a better understanding of the common types of fee arrangements lawyers offer.
Types of Attorney’s Fees
When considering hiring a lawyer, learn not only how much they charge per hour, but how they collect their fees. There are four basic types of attorney fees. They are:
Hourly fees. Most people are familiar with this type of payment arrangement between an attorney and a client. With this fee, the lawyer bills the client for the time they spend working on the client’s case, including phone calls, emails, document preparation, and trial preparation.
A lawyer often bills their time using increments. An increment is the shortest amount of time for billing purposes. For example, an attorney may record the time they spend on a case in 1/10th increments or six-minute increments. Another common method is 15-minute increments.
If the attorney spends less than an increment on a task, they charge the client for a single increment. This system offers transparency for the client, as the client can see what the lawyer is doing for you.
Sometimes the attorney bills different types of work at different rates, depending on the seniority of the attorney or law firm employee performing the task. One disadvantage is that the client may hesitate to ask questions or request needed work because of concern over the cost.
Many clients find hourly billing easily understandable, but it is usually hard to accurately predict how long it will take to resolve a legal matter. The time spent on a case depends on the need. If the workload increases, the hourly charges increase. The client must pay the lawyer’s hourly fees for their time and work, regardless of the outcome.
Retainer. Many attorneys also require potential clients to pay a retainer upfront. Then they charge the client hourly, deducting their fees from the retainer. Lawyers may also require a deposit or advance on other costs such as filing fees, copy charges, travel expenses, or expert witness fees. The lawyer deposits all retainers and advances into a special bank account called a trust account, which attorneys are legally required to maintain specifically for clients’ funds. If fees and costs exceed the initial deposit, the lawyer will ask for additional funds. Collecting an advance on fees, a cost deposit, or a retainer also helps a lawyer avoid taking on frivolous lawsuits, which the Rules of Professional Conduct prohibit.
Flat fee. A flat fee is just what it sounds like. The client pays a flat fee for the whole case. Attorneys often charge flat fees in standard matters such as will preparation, corporate formation, bankruptcy cases, and criminal cases.
Contingency fees. Attorneys who handle plaintiff personal injury cases often do so on a contingency fee basis. Basically, this means that the lawyer does not charge the client any attorney’s fees unless they reach a favorable outcome in their case. In a contingency fee case, the attorney receives a percentage of the client’s total recovery. These kinds of arrangements are often used in personal injury cases because the injured person needs legal representation and may not have the funds to pay an attorney upfront.
Fees Set by a Judge
In some cases, under Florida statutes, a judge sets attorney fees. As in other situations, the amount varies widely depending on the circumstances. The judge considers the time the attorney put into the case, the subject matter of the case and complexity of the issues, the legal skill required, and the results. In addition, the judge looks at the fees local attorneys typically charge for comparable services. Even in these situations, the attorney and client can agree to a fee arrangement in writing, which the judge can approve. In some cases, the judge will order the losing party to pay the winning party’s attorney’s fees.
How Are Hourly Fees Determined?
Unfortunately, attorney’s fees are not standardized and can range widely from one firm to another and among states. Lawyers practicing in small towns or rural areas tend to charge less than those practicing in major metropolitan areas. Also, if a lawyer often represents high-profile clients, they may bill at a higher hourly rate than other attorneys in the same legal community. When determining hourly fees, a lawyer may consider the difficulty of a particular legal task and the amount of time they anticipate it will require.
For example, a case may involve more than one defendant. It may require a meticulous review of many documents, deposing many witnesses, and following complicated procedural requirements. On an hourly basis, a complex case will cost more. Other factors may include the lawyer’s experience, skill, and training in that type of law and the cost of doing business, such as rent, equipment, salaries, and professional education.
A client may not know about all of the work an attorney performs on their behalf, such as investigation, research, and the details of preparing a case.
Preparing to Hire a Lawyer
Before meeting with your lawyer for an initial consultation, get organized. You may find a written list of questions useful. Gather all information together and put it in order. Include current, correct telephone numbers and addresses of interested parties and witnesses, if applicable. Present an overall review of your situation. Write a timeline of events and your goals. Don’t hide, edit or shade the facts. Your lawyer can decide what is favorable and how to handle facts that may be unfavorable. Make copies of everything. Your lawyer will decide if original documents or copies are best.
During the initial consultation, the lawyer will ask you for the details of your legal problem. But the lawyer should also explain how they will represent you, how they charge, and estimate the costs. A lawyer should always discuss the prospective charges at the first meeting with a potential client. A clear agreement concerning fees, right from the beginning, goes a long way toward avoiding misunderstandings as the case progresses.
Both parties should have a full understanding of their relationship and responsibilities, and how to end their relationship, if necessary.
Important details regarding legal fees include:
- The hourly rates for the lawyer and any other staff who might work on the case.
- How often the lawyer will bill you, and how long you have to pay the bill. Are there discounts for early payment or penalties for late payment? What if you wish to dispute a charge?
- In a contingency fee case, what is the contingency percentage, and how is it collected?
- If your lawyer requests a retainer, when or how will the client replenish it?
- Costs such as filing fees or a court reporter are not set by the lawyer. Some attorneys require a client to pay these in advance. Others may require clients to pay these costs as they come up. A lawyer who charges a contingency fee might agree to advance costs, which the client’s recovery may reimburse, but if the client does not recover compensation, they still have to pay those costs back to the lawyer.
- If your lawyer requires a fee deposit or advance on fees, will any portion of that be refunded if you choose not to proceed? Money paid for costs is deposited in the lawyer’s trust account.
- If the fee is large, can a payment schedule spread out the expense and make it more manageable? In the case of a payment arrangement, interest may apply to the outstanding balance. Some lawyers accept payment by major credit card.
- Will the lawyer represent the client for post-trial proceedings, such as an appeal or judgment collection?
- In firms with more than one attorney, which attorney will be primarily responsible for the case?
The overarching question is whether the fee is reasonable. This is difficult to assess. The American Bar Association Model Rules of Professional Conduct, Rule 1.5, says that an attorney may not charge an unreasonable amount for fees or expenses. So, make sure that fees make sense both for the client and from the law firm’s business perspective. There are many ways to determine the price of legal services, but basically, the price must cover the law firm’s overhead, be fair to the client, and still prove profitable to the firm.
Considerations include whether the fee is similar to the fee charged for the same legal services in the local area.
- Is there a high degree of legal skill involved?
- Does the litigation involve complex interpretation of legal issues, or in-depth knowledge of a particular field, such as investments or contracts?
- By accepting a case that involves lengthy and contentious litigation, can the lawyer still accept other cases?
- Are there time limitations or day-to-day pressing matters?
- What is the estimated value of the case?
- Do the attorney’s experience, skills, and reputation support the rate requested?
Choosing the Right Lawyer for You
To practice law, an attorney must have a law school degree and pass a bar examination. Therefore, the most basic qualifications are the same for all lawyers. However, some lawyers may have extensive experience or have obtained specialized training in a particular area of the law. In some situations, this knowledge may benefit the client. Always check the qualifications, experience, and reputation of the lawyer you are considering hiring.
Hiring a lawyer is far more complex than buying a new appliance. While you may feel tempted to simply go with the least expensive option, that’s not necessarily a good idea. If a lawyer is charging an hourly rate, time is money. Therefore, a less expensive but inexperienced lawyer who takes more time to navigate unfamiliar legal and procedural issues may end up charging more in the long run.
A lawyer with a higher hourly rate may provide better service and results. For example, a more experienced attorney charging $500 per hour may resolve a legal problem in 5 hours, for a total cost of $2,500. Another attorney may charge $300 per hour, but because they have less experience, may require 10 hours to resolve the same legal problem, or $3,000 total.
There are countless types of legal issues. Some are more complex and difficult to resolve than others. Whether you are considering an attorney who bills at a lower hourly rate or a higher one, the hourly rate is not the only important question. You will be working with your attorney, possibly for a long time, on a problem that is extremely important to you.
When you meet with a prospective attorney, make sure your business styles and personalities form a good fit. Do you feel confident asking questions or intimidated? How does the lawyer communicate with clients? Are you comfortable with their means of communication and typical response time? Naturally, the law firm may have other cases to handle, but are you confident that your case will receive the attention it deserves?
With all this in mind, take the time to seek out information about a lawyer and interview them before you agree to work with them. The time you take finding the right lawyer can make all the difference in your case.