How a Lawyer Computes Fees

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WHAT WILL HAPPEN DURING MY FIRST VISIT WITH MY LAWYER?
Explain to the lawyer why you have made the appointment. After you have explained your problem, the lawyer will point out any laws or legal procedures that will be involved in handling the matter for you. You should ask a lawyer any questions you may have about your problem or the law relating to it.

During the first visit you should discuss with your lawyer what the fees will be. Many times the exact amount cannot be determined in advance, but the lawyer will at least explain to you how he or she plans to compute your fee, and may be able to give you an estimate of what the charges will be. You have the right to ask that the fee arrangement be put into a letter to you so that there will be no questions about the fees at some later time. Be sure to find out if the time spent in your initial consultation will be billed to you.

If your lawyer requests a deposit, sometimes called a “retainer” or “advance”, ask whether any part of it will be refunded to you if you do not proceed. The amount of the retainer will vary, but it should be a fair amount to cover the initial work and disbursements. On occasion, lawyers may refund an advance or retainer after reimbursing themselves for services actually performed, although traditionally, a “retainer” is considered nonrefundable.

If at some later time you have a question regarding your lawyer’s bill, ask him or her to explain the charges. Most lawyers today maintain detailed records of the time they spend working for each client. This usually serves as a basis for their fees. Questions and problems concerning fees can result because you may be unaware of the extent of the work a lawyer has actually done. Reaching an early agreement as to fees will lessen the chances of any future misunderstanding.

HOW DOES A LAWYER SET FEES?
An attorney will charge you in one of three ways:

On a flat fee basis, for handling a particular type of matter.

On the basis of a percentage of recovery, which is called a contingent fee arrangement.

On an hourly basis.

Other factors that may enter into an attorney’s fees are as follows:
The nature of the problem or matter. A simple problem involving well-established procedures that are routine will cost less than a complex matter that raises a unique question or requires work in a specialized field of law.

The experience, skill and reputation of the lawyer. A lawyer with more experience and ability, who is known to have special skill in limited areas of the law, may charge more per hour than someone not as well known. This may not necessarily result in higher overall fees, if the lawyer can perform the services more efficiently than a less experienced lawyer.

Business expenses, office costs, such as secretaries, rent, telephone, postage, office supplies, law books and legal publications, are indispensable to your lawyer’s effective practice of law. Fees take into account the fact that the lawyer must recover the cost of these items.

Benefits derived from the services rendered. The responsibility assumed by the lawyer and the results may be an important factor in determining the fees.

Paralegals. Certain routine legal matters by a paralegal experienced in an area of the law but who is not a lawyer. You may be charged for work done by such a paralegal.

WHAT ARE HOURLY CHARGES?
Most lawyers establish a fixed hourly charge for their services. A lawyer’s fee is computed by multiplying this fixed hourly charge by the number of hours a lawyer spent working for you. The lawyer then may add direct out-of-pocket expenses such as court filing costs, telephone charges, transportation costs, photocopy charges, legal research, costs of experts engaged in other professional fields.
When retaining an attorney on this basis, you may wish to ask for an estimate of the charges for the requested services, and to request an explanation of what complications might arise and what effect the complications will have on your fee.

Hourly rates of lawyers will depend upon the lawyer’s experience and the demand for his or her services. There is no set hourly rate, and the rates vary.

Remember that only part of the hourly fee is actually for the lawyer’s services – much of the fee goes to pay his or her business expenses as described above.

WHAT IS A CONTINGENT FEE?
In some types of personal injury and damage cases, an attorney may agree to a contingent fee arrangement. In this situation, the fee is paid for the attorney’s services if, and only if, there is some financial recovery. If there is none, the attorney is not entitled to collect any fee, but the client must pay court costs and other expenses directly related to the case. Contingent fees will usually be a percentage of the recovery. If you have a matter for which such an arrangement might be appropriate, your lawyer will discuss the possibility with you when you talk about the fees during your first visit. Contingent fees will usually be substantially more than fees based on hourly rates yet are often attractive to the client because the fee is not payable unless there is a recovery. Contingent fee agreements should be in writing.