|How Lawyers Set Their Fees|
Types of Fee Arrangements
The three most commons types of fee arrangements are:
Time billing is when the client is charged for the amount of time the lawyer and their staff spend on the client's case. Time billing is the most common form of fee arrangement.
Contingent fees depend on the outcome of the case. This means that the attorney is paid a fee out of the proceeds collected on the client's behalf. This type of fee arrangement is most common in cases where the client has been injured, but is sometimes used in other cases. Attorneys are not allowed to have a contingent fee arrangement in most family law matters.
Flat rates are sometimes used in instances where the client is faced with a relatively well-defined problem, and the attorney can estimate, in advance, how much time and effort is likely to be required. With a flat fee arrangement, the client and attorney will agree upon a single, final price for the case before any work is done. Flat fee arrangements are most often used in uncontested divorces, incorporation of small businesses, simple wills, and simple bankruptcies. Where there is a significant amount of disagreement, or a complicated situation, it is usually not possible for the attorney or the client to know in advance how difficult the problem will be.
In any type of fee arrangement, it is common for the attorney to require an advanced payment for some fees and expenses. This is often called a "Retainer."
Factors That Determine Lawyers' Fees
The Rules of Professional Conduct, which govern the conduct of lawyers, provides guidelines to be considered in setting legal fees. Among these include:
The Rules of Professional Conduct also point out to lawyers that the legal profession is a branch of the administration of justice, and not merely a money-making trade.
In certain types of cases the court may impose a statute or award attorney fees and costs when one party is successful. These are most often wage claim cases or civil rights cases (filed under the Equal Employment Opportunity Act or the Americans with Disabilities Act.)
Attorneys will usually take the following factors into account when charging clients:
Time and Effort. Lawyers will keep accurate records depicting the time that they, other lawyers, and sometimes office staff, spend on your case. Different attorneys value their time at different rates based upon their experience, subject knowledge, and skills. There is, however, a degree of uniformity based on what other lawyers in the community charge.
Ability, Experience, and Reputation. The ability, experience, and reputation of the attorney you choose are going to have an effect on the fees that you may be charged. If you lawyer has the reputation of being an expert or specialist in a specific type of law, then the attorney may charge you more than a lawyer with less experience in that field.
Results. The results obtained from your case can also be a factor in your fees. No lawyer can guarantee their results in a contested matter, and as such most lawyers will expect to be paid regardless of the outcome of the case. In instances of a contingency fee, the lawyer will take a percentage of the recovery award, but only if the case is won. If the case is lost, then the lawyer is paid nothing for the work done. Contingency fee cases are generally set up for cases involving personal injury or damages.
Frequent Clients. Your lawyer will likely take into consideration how frequently you have utilized their services. Similar to other businesses, Lawyers may reduce their charges for clients that they have worked with on numerous occasions.
Other Considerations. As with any other professional service, an attorney must consider office expenses and overhead. An attorney's effort is supported by the efforts of a variety of others. The fee arrangement can include separate charges for secretarial, clerical, and other assistance.
Types of Cases
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