Lawyers can also accept cases without requiring their clients to pay anything upfront.
Lawyers charge their fees in different ways. There are at least four main different ways lawyers bill their fees. You have to understand how these charging methods work if you want to have a clear grasp of what you should expect cost-wise.
There are some lawyers who provide no win no fee cases help to their clients. Many of them are involved in personal injury, medical malpractice, and debt collection suits. There are also lawyers who charge by the hour, and those who require an upfront payment. But, you’d definitely know more about the various fees that lawyers charge their clients if you read more on how these things work.
Here’s a short discussion on the real cost of getting a lawyer:
- Hourly Rate
The most common way lawyers and law firms charge their clients for their professional fees is through the hourly rate. This method is used in almost all types of engagements and projects. In this setup, your lawyer will tell you how much they’re going to charge you per hour of their service before they start working on your lawsuit or concern. They’re going to put this rate in their contract or agreement, which you need to sign if you agree to pay that rate.
There’s no uniform standard on how lawyers and law offices divide their hours in a day or what specific minutes and hours they’re going to charge you for. A common practice of many lawyers, however, is that they divide each hour into ten parts or increments of six minutes each. Then, they’ll bill you for every six minutes that they spend time on your case.
Here are some of the activities, tasks, transactions, and even events for which they’re going to charge you:
- Time they spent on reading your documents, files, letters, etc.
- Doing research on law and jurisprudence relevant to your case or concern
- Going to places or offices to get evidence
- Drafting demand or opposition letters, and sending them out
- Meeting with you or negotiating terms of contract
- Making phone calls and doing visits to government agencies and offices to request documents or represent you in meetings
Some lawyers and law offices also bill you for the time rendered by their paralegals working on your case, but this is typically at a much lower rate.
The disadvantage of the hourly rate to the client is that they’d seldom have an estimate of the real cost of getting their lawyer until they receive their billing statement.
Market studies show that the average rate of lawyers in different states and areas of practice is around USD$275 per hour.
- Flat Fee Rate
Another way lawyers charge is through a flat-fee rate. This is pretty straightforward—the lawyer just charges a particular fee for working on your case or concern. The flat fee is typically the total amount of fees that you’ll pay to your lawyer, but you’d usually have to pay all of this upfront before they start working. In practice, this payment method is more commonly used in bankruptcies, and drafting contracts and agreements.
The advantage of the flat fee is that you’ll know exactly how much you’re going to pay. This also makes sure that there won’t be any surprises or sudden charges. It also works well for the lawyer since they get their payment upfront and don’t have to track the time they spend on the case. They also don’t have to bill the client every so often.
- Retainer Fees
Another payment method that lawyers use is by charging retainer fees. In a retainer fee arrangement, the clients are typically required to deposit a lump sum of money with their attorney. Their lawyer can charge the service time they rendered and deduct from this lump sum deposit. As the balance of the account decreases, the lawyer would usually send a letter or billing statement to the client that they need to replenish their retainer fee deposit.
It’s also typical for lawyers to use the hourly rate to compute for the specific number of hours that they’ve rendered for the case or project. The total billable hours and the corresponding fee would then be deducted from the retainer fee deposit.
- Contingency Fees
Lawyers can also accept cases without requiring their clients to pay anything upfront. Instead, they’re going to take their share of the proceeds when the case is won. This charging method is called the contingency fee method. The lawyers would typically say that the client doesn’t have to pay anything upfront. But, if they win the case, the lawyer would be entitled to a portion of the money judgment or the amount recovered.
Percentages vary, but it’s usual for lawyers to ask for a third of the total amount of the judgment award.
Hiring a lawyer will entail expenses on your part as a client, one way or the other. Thus, it should be in your best interest to gain a bit of understanding of how different lawyers charge their fees. This would help you avoid any surprises concerning costs.