Lawyers fees

How much do lawyers charge?

It can vary dramatically from state to state, lawyer to lawyer, matter to matter, and client to client. For example, if you want to retain lawyers who will put forth as strong a case for you as the "dream team" put on in defense of OJ Simpson, you are talking millions of dollars, paid up front.

On the other hand, if you are injured in a serious accident and it appears that someone else is primarily at fault, such as the driver of the car in which you were a passenger, or the driver of the other car, or the auto manufacturer, you can have a highly experienced lawyer handle your case on a contingency fee basis, without you paying anything up front, and the lawyer's fee coming only from only the recovery s/he obtains for you.

How are fees determined?

Clients and lawyers usually may work out any fee arrangement that they wish, so long as the fee the client will pay is "not excessive or unconscionable."

Typically there are 5 basic types of fee structure. Sometimes these are used in combination.

Flat fee, based on the type of legal matter. Such as a simple Will $X, or to defend you in a drunk driving arrest through trial, $Y. The lawyer is basing the fee on his or her experience as to how much time and effort and skill is usual in the type of matter. Also, many clients prefer a fixed fee arrangement. Sometimes there is a provision that the fixed fee may be time based.

Time based, typically using the number of hours devoted to your matter multiplied by the lawyer's (and sometime staff's) hourly charges. This is the basis often used in business matters, such as negotiating the purchase or sale of a business, or defending a patent against attack.

A "contingency fee", which is based on a percentage of the monetary recovery the lawyer ultimately obtains for you as a result of negotiation or trial. This is the basis on which most accident and personal injury cases are handled. A contingency fee enables you to retain a lawyer who will work hard for you even though you do not have the money to advance.

Statutory fees. In some matters the prevailing fee is actually or essentially set by law. For example, lawyers in Social Security Disability cases may charge no more than 25% of the recovery or $4,000, whichever is less; few lawyers could afford to handle a case for anything lower.

Asset-based fees. In many types of matters the amount of money involved is critical in determining the legal fee. For example, in residential real estate contracts and closings the price of the house often is the key basis for the fee. The fee on a $1 million home will be several times that of a $100,000 home even though the work is typically not several times greater, because the exposure is 10 times greater. Similarly in probate matters fees often depend on the amount of the assets in the probate estate.

How are legal fees based?

Before you retain any lawyer to represent you we advise you to do one very important thing. Ask about fees, expenses and any other charges, and make sure you and the lawyer both have a clear understanding as to what the fee will be, or the basis on which the lawyer will be charging you a fee, preferably in writing.

Many clients and many lawyers insist on discussing fees in advance, and setting forth the agreed upon fee - or the basis for determining the fee -- in a written "retainer agreement". In some types of matters, in some states, a written fee agreement is even required.

We recognize that some clients and some lawyers are uncomfortable taking about fees. Also, sometimes there is an emergency that precludes entering into a formal agreement right away. But our advice is to always get a written understanding as to the basis of the fee. It saves a lot of misunderstanding in the long run.

Can't you combine these methods?

Yes, usually you can do whatever you and the lawyer agree on.

One increasingly popular basis for fees involves a "Value Added" bonus that can be a combination of several of these methods.

For example, assume that your copyright has been violated and you wish to recover from the wrongdoer. Or that you wish to contest a Will and claim that you are the legal beneficiary, not the ex-spouse. Both of these types of action are typically not handled on a contingency basis by capable lawyers. To hold down your initial out-of-pocket fees, you and the lawyer may agree that the lawyer will handle the matter for a reduced hourly fee PLUS a percentage of any recovery in excess of $Z.

Sometimes the value added may be speed. For example, assume that you own and want to develop a piece of commercial real estate, but it requires a zoning change to do so. You might agree that the faster the change can take place so you can build, the higher the fee the lawyer will receive.

Depending on the state, there are certain matters in which incentive arrangements may be illegal. For example, in criminal cases there often are prohibitions against basing the fee in a particular case on the result.

If I am sued and I win, does the other side have to reimburse me for my court costs and attorney fees?

Generally "yes" on court costs (a relatively minor amount in most litigation) but "NO" on attorney's fees. They are generally your responsibility as a defendant.

Will I need money to pursue a product defect case?

Most product defect cases are handled on a contingency fee basis, which means the attorney only recovers if the case is successful, and then the fee consists of a portion of the award or settlement. You do not pay the attorney on an hourly basis, and depending on your state's laws, the attorney may even advance the expenses of a lawsuit, including the costs of expert witnesses. However, some states and some attorneys require that a claimant pay the costs associated with pursuing a lawsuit, either up front or as incurred.

Product liability cases can be very expensive to bring and move forward. While you may not have to pay the attorney a fee if there is no recovery, you may be responsible for costs (including expert witness testimony) if you lose your case. We suggest you discuss your responsibility to pay fees before retaining an attorney for your case.

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