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The prudent business person will investigate the cost of legal
services just as he or she would carefully scrutinize estimates for
any other service. It is important to question and understand the
conventional fee structure used by attorneys, in order to
intelligently estimate a bill for legal services. There are five
basic types of fees:
* Flat fees are charged for a standard service such as incorporation
of a small business, divorce, and bankruptcy.
* Contingency fees are usually based on positive results in some
legal action such as bill collection. A percentage of the amount
recovered becomes the attorney's fee.
* Annual or monthly retainers are negotiated when an attorney agrees
to perform all the legal work required by a corporation. This is used
when the work is predictable and does not require extensive time away
from the office.
* Hourly charges are frequently used for cases such as lawsuits and
* Other fees that may be included in the charges are process service
fees, investigations, court costs, travel expenses, long distance
calls, expert testimony, medical reports, appraisals and out-of-
Different services are billed in different ways. A higher hourly rate
by an experienced lawyer can result in a lower charge than the bill
from a less expensive but inexperienced lawyer. Charges are relative
to the experience and legal knowledge of the members of a legal firm
who may work on the case. They range from the highest fees for senior
members of the firm, and decrease for the work of the associate
attorney and the legal assistant. The lowest rates are assigned to
the work of the paralegal staff who prepare routine documents under
the supervision of a lawyer.
Fees can also be altered by the routine or special circumstances of
the case, as well as the unexpected results of preliminary procedures
and the experience and legal knowledge required to complete the
During the first consultation (the fee for which may be waived by the
attorney), the prospective client should collect enough information
to agree upon a billing method. Some ideas for discussion during this
meeting might be:
* If a retainer agreement is used, it should specify that, wherever
possible, routine work should be done at the appropriate staff level.
Final documents should be reviewed by the next qualified level of
* If an associate is handling the case, the client should not be
billed for office conferences during which the inexperienced attorney
is instructed or has his or her work reviewed by a senior counsel.
* The client should request a clear explanation of travel and
waiting time rates and should not be billed at the same rate as
* If hourly charges are selected, it is a wise precaution to place a
cap on the fee and to plan for a meeting to discuss a future course
of action and additional fees.
* How is research charged? If the research for this assignment is
used to educate the junior attorney, the expense should not be borne
by the client.
* How are overhead charges such as copies, messenger services,
overnight mail services charged to the client? While multiple copies
of necessary documents can be billed to a client account, single
house copies of a document should not be billed. Messenger and
overnight mail service charges should not accrue due to
procrastination on the part of the attorney, but rather as a result
of valid, emergency changes.
* How are overtime charges accrued? If the overtime services of the
law office staff are a direct result of proceedings in connection
with the client's interests, the overtime may be billed to the
client. However, if because of the volume of work, the lawyer
requires a secretary to clear up a backlog, the client should not be
billed for the secretary's overtime. The invoice should state the
reason for the overtime and the nature of the work done during the
* How are document revisions charged? Since documents are frequently
stored on word processors, small changes can be easily and quickly
inserted without considerable expense to either the firm or the
client. If extensive revisions are the result of valid discussions
between the two contracting parties, fees for such changes are valid.
* Experts suggest that to ensure that erroneous charges are not
included in the invoice, the client should initially request copies
of each letter or document for which the firm is billing. This allows
the client a framework for a discussion of a bill which is unclear or
seems unreasonably high. If the client has a copy of the lawyer's
actual work product, the lawyer will be more disposed to charge a
more reasonable fee.
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