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PREMIUM LEGAL RESOURCES LEGAL FORMS ASK A LAWYER

WHAT TYPES OF FEE ARRANGEMENTS ARE MOST COMMON?

Fees are one of the least discussed parts of any legal case yet are often of primary importance to both the client and the lawyer. Frequently fees are not discussed early enough, candidly enough, or in enough detail. Why? Generally, because the discussion can be uncomfortable for both the client and the attorney. Becoming knowledgeable about the types of fee arrangements can help you to feel more comfortable about this essential part of hiring an attorney.

The market rate for any given legal service is generally a range of fees which varies by locality. A "fair" fee is an individual decision and is likely to be based on the following factors:

(1) How much can you afford?
(2) Is it a routine matter or does it require special expertise?
(3) What is the range of attorney rates for this type of case in your area?
(4) How much work can you do on the case?

The type of fee arrangement that you make with your lawyer will have a significant impact on how much you will pay for the services. There are several common types of fee arrangements used by lawyers:

Flat fee The lawyer will charge you a specific total fee for your case. Ask if photocopying, typing, and other out-of-pocket expenses are covered by this flat fee. Often the total bill is the flat fee plus these out-of- pocket expenses. A flat fee is usually offered only if your case is relatively simple or routine. While lawyers will not set a flat fee for litigation, they can usually give a good estimate of the costs at each stage.

Hourly rate The attorney will charge you for each hour (or portion of an hour) that he or she works on your case. If your attorney's fee is $100 per hour, and he or she works ten hours, the cost will be $1,000. Some attorneys charge a higher rate for court work and less per hour for research or case preparation. If you agree to an hourly rate, you need to know how much experience your attorney has had with your type of case. A less experienced attorney will usually require more time to research your case, however, he or she may charge a lower hourly rate. Large law firms usually charge more than small law firms and urban attorneys often charge more per hour than attorneys practicing in rural areas. Again, you should ask what is included in the hourly rate. If other staff such as secretaries, messengers, paralegals, and law clerks will be working on your case, how will their time be charged to you? Costs and out- of-pocket expenses will usually be billed in addition to the hourly rate.

Contingency fee Under this arrangement, the attorney's fee is based on a percentage of what you are awarded in the case. If you lose the case, the attorney does not get a fee, although you will still have to pay expenses. The contingency fee percentage varies and some lawyers offer a sliding scale based on how far along the case is when it is settled. A one-third fee is common. Also, ask whether the lawyer will calculate the fee before or after the expenses. This can make a substantial difference, since calculating the percentage of the attorney's fee after the expenses have been deducted increases the amount of money you receive.

This type of fee is usually found in personal injury cases, accidental claims, property damage cases, or other cases where a large amount of money is in contention.

Referral fee On occasion, an attorney who has accepted your case may refer you to another attorney who is more experienced. Sometimes the first attorney will ask for a portion of the total fee you pay for the case. This "referral fee" may be prohibited under state codes of professional responsibility unless certain criteria are met. The criteria are likely to include the stipulation that client fees can only be split if each attorney does some work, the client knows about the arrangement, and the total fee is reasonable. You may contact the state bar association with questions about the appropriateness of fee arrangements.

Again, regardless of the fee structure you and your attorney agree upon, the specifics of the agreement should be in writing.

ARE THERE WAYS TO REDUCE MY ATTORNEY FEES?

Yes. Remember that it is your case and that the attorney is an expert who is assisting you to resolve a problem or prevent a potential problem.

A Lawyer's Fee May Be Negotiable Despite the importance of fees to both parties, consumers rarely choose a lawyer based on price, yet it is important to remember that a lawyer's fees are often negotiable. Your lawyer is unlikely to invite you to bargain over fees. However, there are some common-sense tips to consider that may allow you to negotiate without outright negotiation. For example, smaller firms usually charge less than larger firms. If your case is interesting or novel or extremely lucrative, an attorney may be willing to negotiate. If the firm is actively seeking more work or is new to your locality, it may handle a case for less as a way to build its caseload.

There are two general situations in which you may wish to raise the issue of lower fees. First, if your case has the possibility of significant attorney's fees, you are likely to be in a strong position if you are willing to shop around and to negotiate. It's wise to negotiate, for example, in personal injury cases. Most lawyers will propose a standard contingency fee for usually one-third of any damages that they win for you, nothing if they lose. Bear in mind, the contingency fee is designed to cover the risk the lawyer is taking yet some experts estimate that at least one out of every five contingency fee cases involves virtually no risk.

It makes sense to sit down with several different lawyers before choosing one. Ask each to assess the merits of the case and the likelihood that you will receive money if you are successful. The consultations will be free and you will come away with a more realistic sense of what fee arrangements you should agree to. Generally, the higher the likelihood of success in a case, the lower the contingency percentage you may be able to negotiate. Some clients also prefer to pay their lawyers on a sliding scale. For example, 33 percent for the first $100,000 in damages, 25 percent for the next $100,000, and 15 percent above that.

Second, other fee arrangements that you may be able to negotiate and which may save you money include flat fees instead of hourly charges, hourly rates up to a prearranged maximum for the entire project, and fees based partly on the outcome.

Comparison Shop for Flat Fees on Simple Cases When you need a simple transaction like a will, a real estate closing, or a power of attorney, you can comparison shop. Contracting for legal services is like any other consumer transaction in that the prices and the work product vary. Call several attorneys and compare their answers to the questions listed above. Only after you get a sense of the range of fees will you be able to determine which rate and which attorney best suit you and your budget.

Ask about the Billing Method for Hourly Rates A written agreement specifying the fee arrangement and the work involved is the best way of assuring clear communication between you and your attorney about the total cost of the case. For example, if your attorney charges by the quarter hour, you will know that if you call and speak to your attorney for five minutes, you will be charged one- quarter of the attorney's hourly rate. Knowing that, you may choose to give the information to his secretary or write a brief note. Asking a lawyer to bill at 6- minute instead of 15-minute intervals can save you hundreds of dollars. For example, if a lawyer's minimum billing unit is 15 minutes, each 5-minute phone call will be billed at one-fourth of the hourly rate. At 6-minute phone intervals, a 5-minute phone call costs just one-tenth of the hourly rate.

Choose a Lawyer with the Appropriate Qualifications Most legal work is relatively routine. It often has little to do with complex legal theory or constitutional analysis, and much more to do with knowing which form to fill out and which county clerk will process it most quickly. Smaller firms, attorneys charging lower rates, and less experienced attorneys are often well suited for the broad range of legal work needed by many consumers. Recently graduated attorneys may offer to work for a somewhat lower price to compensate for the extra risk and time involved in becoming familiar with the specific area of law. Lawyers who charge $300 an hour and up are appropriate for very sophisticated trusts and estate work, corporate litigation, or complex criminal defense work.

Be wary of big law firms where you may be offered the illusion that the young associate who has been assigned to your case (at a lower rate) is being supervised closely by the senior partners listed in the firm name. The associate may take three or four times as long as an experienced lawyer to draft the necessary papers. You might want to meet with the associate and the supervising partner before work begins to ascertain who is going to do what, and to get an estimate as to how much the work should cost. Such a meeting is likely to encourage the firm not to charge you for the associate's on-the-job training.

Offer to Perform Some of the Work Discuss ways that you can help the attorney on the case. For example, if the attorney needs copies of birth certificates or other records, you can write the letter to request them and save your attorney the time needed to dictate and process the letter.

Splitting the work with an attorney also can cut the cost of writing a will or health-care power of attorney or setting up a trust. You can draft the document, using a standard form as a guide, and then present it to your lawyer for reviewing and finalizing the work. Make sure that your attorney is willing to do this kind of work and discuss the fee if major rewriting is needed.

Hire the Attorney to Act as Go-between Some lawyers are open to negotiating a lawyer fee if you are only looking for their legal expertise to write a letter to the other side to settle. You may wish to hire the attorney for this type of limited assistance initially and follow up yourself. If you are unsuccessful, you may wish to retain the attorney to further pursue the case.

Hire the Attorney to Act as Your Pro Se Coach If you want to represent yourself in court (called appearing pro se), hire your attorney to act as a pro se coach who will review documents and letters that you prepare and sign. The attorney may also help you prepare for a hearing in which you represent yourself. Examples of when this might be appropriate if you want to appear in small claims court or if you want to enforce a lease or collect bills owed to you.

Choose a Lawyer Who Specializes in What You Need You are likely to save money by choosing someone who has the knowledge and office systems set up to handle cases like yours cost-effectively. That attorney is also more likely to be knowledgeable about specific procedures relating to your case, expert witnesses in the area, and other attorney experts for consultation.

Prepare for Your Attorney Meetings Come prepared with all of the necessary information and papers. Ask questions to make sure that you are providing everything the attorney needs. Think about your legal problem and gather the information your attorney will need. Write down the names, addresses, and phone numbers of other people involved in the case. Write down the important events or facts. Bring any relevant papers such as contracts, letters, court notices, or leases. Keep copies of this information and provide it to your attorney. The more work that you do to prepare, the less time your attorney needs to spend (and charge you) for finding the information.

Answer Your Attorney's Questions Fully Your communications to your attorney are confidential. Pay close attention to the questions your attorney asks you and offer complete and honest answers. If you are not sure if a piece of information is relevant, ask your attorney. If your attorney knows all the facts as early as possible in the case, it will save on time (and money) that might be spent later on further investigation or misdirected case development.

If the Situation Changes, Tell Your Attorney as Soon as Possible You are a primary source of information about your case and your attorney will act based on the information you have provided. If something happens or if you find out new information which may affect your case, give the information to your attorney quickly. It may change what he or she is doing on your case. It may save the attorney's time (and your money) or save the attorney from heading in the wrong direction on a case.

Maximize the Value of Your Contacts with Your Attorney Keep in mind that you will pay for virtually every minute you spend with your attorney. While a friendly relationship can facilitate the handling of your case, limit the phone calls and meetings to the business of the case. You will not want to pay for a long, friendly conversation about other matters.

Consolidate your questions or information giving into a single call. Pass on information in writing or to other office staff rather than speaking directly with the attorney unless you have a specific reason to do so.

Examine Your Bill Request that your attorney bill you on a regular basis. Even if you have agreed on a contingency fee and will not actually pay the expenses until the case is settled, you should periodically examine the expenses. Question any items that you do not understand or that are not covered in your fee agreement. For example, your attorney may list the cost of attending continuing legal education seminars in the area of your case. Unless you have agreed to cover these costs, you may wish to question this entry.

Candidly Describe Your Financial Limitations Finally, if you have extremely limited funds, discuss the situation with your attorney. If you have a long- standing relationship, you may be able to work out a payment plan. If the situation is compelling, some attorneys may be willing to help someone who genuinely needs it.
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Excerpted from An Older Person's Guide to Finding Legal Help
from Legal Counsel for the Elderly
601 E Street, NW Washington, DC 20049

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Brought to you by - The 'Lectric Law Library
The Net's Finest Legal Resource For Legal Pros & Laypeople Alike.
http://www.lectlaw.com

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