Generally speaking, attorneys charge their clients for three things: fees, costs, and expenses. These items should not be
confused.
Your fee agreement should cover all three. However, beyond that fact, there is no such thing as a "standard" legal fee
agreement. Attorneys charge more or less in fees based upon their experience, market forces in the geographical vicinity of
their practice, the type and complexity of the case, and any number of other factors. There are, however, four fairly common
categories of legal fees:
If you are shopping for an attorney, having a basic understanding these four common categories of legal fees will help youmake the best choice of counsel for your case -- and for your wallet.
Retainers
A retainer is a lump sum payment to an attorney made in advance of any work performed on your lawsuit or other legal
matter. The attorney will request a specific sum of money based upon his or her estimation of the complexity of the case and
the amount of time it will take. The attorney then deducts his or her legal fees, court costs, and related expenses from the
retainer as they accrue. The rate for the attorney's legal fees is set in the retainer fee agreement and will typically include an
hourly rate (see below) plus minimums for things like reading and responding to e-mails, taking and making phone calls, and
reading or generating correspondence. As the client, you should expect to receive a periodic statement from your attorney
detailing both the deductions from, and remaining balance of, your retainer. Don't be surprised how quickly an attorney will
run through even a substantial retainer -- legal fees, court costs, and expenses add up!
The retainer is often combined with a "minimum fee" provision. The minimum fee amount is non-refundable. The minimum
fee may serve as a "flat fee" for certain basic legal services that need to be completed at the start of proceedings. For
example, an attorney may ask for a retainer of $10,000 with a "minimum fee" of $2,500 to cover records review, limited
investigation, and the drafting of an initial complaint or original appellate brief. The minimum fee guarantees the attorney a
reasonable amount of compensation for his or her efforts on your behalf even if your legal issues settle more quickly than
anticipated, or you decide to change lawyers. Depending on the type of case, the minimum fee may be several hundred
dollars up to many thousands of dollars. The "minimum fee" is in addition to any court costs or expenses the attorney has
incurred on your behalf.
If a case is expected to proceed in stages, or if the original retainer fee is exhausted before the matter has been fully
resolved, an additional retainer amount will be requested according to the terms of the retainer fee agreement. Generally,
this additional amount must be paid before work can continue.
Retainer fee agreements are common for general practitioners who make themselves available to handle a variety of legal
issues as they arise, by appellate attorneys who may handle a case through several courts, and for many general civil
litigation cases. They may also be used by criminal defense attorneys in some circumstances.
Flat Fees
Flat fees are typically charged for simple, well-defined matters such as preparing a simple will, or handling an uncontested
divorce because the attorney can predict, within reason, the amount of time and resources that will be required to see the
matter to completion. Flat fees are rarely used for complicated cases, or those which will proceed in stages over an
extended period of time.
Hourly Billing Rates
Hourly billing rates are exactly what they sound like they are: a predetermined amount of money that your attorney will
charge for the time spent on your legal matter(s). Hourly rates vary widely depending on the legal market, your attorney's
years of legal practice, and your attorney's level of expertise. A lower hourly rate isn't always a bargain -- newer attorneys
charge less but take longer to do tasks than an experienced attorney. Likewise, a higher hourly rate doesn't always equal
higher-quality work or better service -- large law firms often charge more per hour because they have higher overhead costs,
but if you aren't their "biggest" or "most important" client, your legal matters may end up getting "back burnered" and you
may end up feeling neglected.
As with retainer fee agreements, an hourly fee agreement will typically include minimums for things like reading and
responding to e-mails, taking and making phone calls, and reading or generating correspondence. Attorneys typically
charge in increments of one tenth of an hour (6 minutes) so the minimum charge for e-mails, phone calls, and
correspondence is frequently set at 6 (or 12) minutes of billable time. The actual time charged will be more if you are
"chatty" so if you are watching the bottom line, it makes sense to be brief and to the point.
Contingency Fees
Contingency fees are most frequently used in litigation by plaintiff's attorneys. They allow potential plaintiffs to retain an
attorney they could not otherwise afford. The attorney receives a percentage of any settlement or judgment. A 30 or 40
percent contingency fee (after the deduction of court costs) is not uncommon. This sounds like a lot, but bear in mind that
you, the client, pay nothing unless and until the attorney wins the case while the attorney bears the risk that his or her time
will be entirely uncompensated if the case is lost. Be forewarned that, for ethical reasons, contingency fees are typically not
allowed in certain types of cases, most notably among them criminal cases and divorce cases.
confused.
 | Fees cover the services provided by the attorney(s) and office support staff (if any). Charges for fees will vary from | |
| attorney to attorney, but should not be unreasonable. |
| Costs cover amounts that must be paid to third parties on your behalf such as the court or a process server. Costs | |
| are typically out of the attorney's control --- courts and other third-parties almost always have standardized rate schedules. |
| Expenses include the monies expended by the attorney to make or obtain photocopies of documents, travel to the | |
| courthouse, etc. Attorneys may set widely differing rates for chargeable expenses. Review your attorney's rates to make sure they are reasonable and acceptable to you. |
Your fee agreement should cover all three. However, beyond that fact, there is no such thing as a "standard" legal fee
agreement. Attorneys charge more or less in fees based upon their experience, market forces in the geographical vicinity of
their practice, the type and complexity of the case, and any number of other factors. There are, however, four fairly common
categories of legal fees:
| Retainers (with or without a "minimum") | |
| Flat Fees | |
| Hourly Billing | |
| Contingent Fees |
If you are shopping for an attorney, having a basic understanding these four common categories of legal fees will help you
Retainers
A retainer is a lump sum payment to an attorney made in advance of any work performed on your lawsuit or other legal
matter. The attorney will request a specific sum of money based upon his or her estimation of the complexity of the case and
the amount of time it will take. The attorney then deducts his or her legal fees, court costs, and related expenses from the
retainer as they accrue. The rate for the attorney's legal fees is set in the retainer fee agreement and will typically include an
hourly rate (see below) plus minimums for things like reading and responding to e-mails, taking and making phone calls, and
reading or generating correspondence. As the client, you should expect to receive a periodic statement from your attorney
detailing both the deductions from, and remaining balance of, your retainer. Don't be surprised how quickly an attorney will
run through even a substantial retainer -- legal fees, court costs, and expenses add up!
The retainer is often combined with a "minimum fee" provision. The minimum fee amount is non-refundable. The minimum
fee may serve as a "flat fee" for certain basic legal services that need to be completed at the start of proceedings. For
example, an attorney may ask for a retainer of $10,000 with a "minimum fee" of $2,500 to cover records review, limited
investigation, and the drafting of an initial complaint or original appellate brief. The minimum fee guarantees the attorney a
reasonable amount of compensation for his or her efforts on your behalf even if your legal issues settle more quickly than
anticipated, or you decide to change lawyers. Depending on the type of case, the minimum fee may be several hundred
dollars up to many thousands of dollars. The "minimum fee" is in addition to any court costs or expenses the attorney has
incurred on your behalf.
If a case is expected to proceed in stages, or if the original retainer fee is exhausted before the matter has been fully
resolved, an additional retainer amount will be requested according to the terms of the retainer fee agreement. Generally,
this additional amount must be paid before work can continue.
Retainer fee agreements are common for general practitioners who make themselves available to handle a variety of legal
issues as they arise, by appellate attorneys who may handle a case through several courts, and for many general civil
litigation cases. They may also be used by criminal defense attorneys in some circumstances.
Flat Fees
Flat fees are typically charged for simple, well-defined matters such as preparing a simple will, or handling an uncontested
divorce because the attorney can predict, within reason, the amount of time and resources that will be required to see the
matter to completion. Flat fees are rarely used for complicated cases, or those which will proceed in stages over an
extended period of time.
Hourly Billing Rates
Hourly billing rates are exactly what they sound like they are: a predetermined amount of money that your attorney will
charge for the time spent on your legal matter(s). Hourly rates vary widely depending on the legal market, your attorney's
years of legal practice, and your attorney's level of expertise. A lower hourly rate isn't always a bargain -- newer attorneys
charge less but take longer to do tasks than an experienced attorney. Likewise, a higher hourly rate doesn't always equal
higher-quality work or better service -- large law firms often charge more per hour because they have higher overhead costs,
but if you aren't their "biggest" or "most important" client, your legal matters may end up getting "back burnered" and you
may end up feeling neglected.
As with retainer fee agreements, an hourly fee agreement will typically include minimums for things like reading and
responding to e-mails, taking and making phone calls, and reading or generating correspondence. Attorneys typically
charge in increments of one tenth of an hour (6 minutes) so the minimum charge for e-mails, phone calls, and
correspondence is frequently set at 6 (or 12) minutes of billable time. The actual time charged will be more if you are
"chatty" so if you are watching the bottom line, it makes sense to be brief and to the point.
Contingency Fees
Contingency fees are most frequently used in litigation by plaintiff's attorneys. They allow potential plaintiffs to retain an
attorney they could not otherwise afford. The attorney receives a percentage of any settlement or judgment. A 30 or 40
percent contingency fee (after the deduction of court costs) is not uncommon. This sounds like a lot, but bear in mind that
you, the client, pay nothing unless and until the attorney wins the case while the attorney bears the risk that his or her time
will be entirely uncompensated if the case is lost. Be forewarned that, for ethical reasons, contingency fees are typically not
allowed in certain types of cases, most notably among them criminal cases and divorce cases.