What Are Attorney Fees?
Attorney fees are the amount of money billed to a client by a lawyer for performing legal services on the client's behalf. You may also see attorney fees referred to as attorney's fees or attorneys' fees. Attorney fees can be set in a few different ways, such as by an attorney-client compensation agreement, by statute, or by a court.
Types of Attorney Fees
Understanding the different types of attorney fees will help you find the right lawyer for your unique situation. The kind of fee arrangement available to you will depend on the type of legal issue you face. Several types of attorney fees and fee arrangements exist. Common examples include:
A lawyer may charge an upfront fee so you can meet with the lawyer and they can determine whether they will be able to assist you with your legal issue. Consultation fees are typically charged on a flat-rate basis. Many lawyers do not charge this initial consultation fee, but you should always check ahead of time to be certain.
A lawyer may charge a flat fee for some kinds of legal matters. Attorneys who handle large volumes of a particular kind of case may opt for charging a flat fee as they can use standardized forms and practices for each case they take on. Generally speaking, lawyers use flat fees for relatively uncomplicated cases, including:
- Mortgage foreclosures
- Preparing wills
- Tenant evictions
- Uncontested divorces
Hourly attorney fees are the most common type of arrangement. A lawyer will charge a per hour rate, then track the time spent working on the case in fractions of an hour, for example in 10ths of an hour (or 6-minute increments).
Lawyers may charge different rates depending on the type of case. So, you may pay $100 per hour for contract preparation, but $200 per hour for litigation. Lawyers may also bill for some paralegal fees, though this is generally done at a lower rate than the attorney fees.
Common among medical malpractice and personal injury attorneys, contingency fees are based on a percentage of the amount you receive. This overall amount of money can come from a judgment in court, or it can be negotiated in a case's settlement. For example, if you are awarded $1 million in a case, your lawyer may get 40% of that as a contingency fee. The more complex or risky your case is, the higher the contingency fee a lawyer is likely to request.
If you agree to attorney fees using this arrangement, your lawyer does not get a fee if you lose your case. However, you often will still need to pay expenses even if you do lose the case.
Contingency fee percentages can vary, with a one-third fee (or 33 1/3%) a common arrangement. Some jurisdictions or attorneys adjust this rate depending on how a given case progresses. For instance, you may pay a lower rate if your case is settled prior to trial, but a higher rate if you make an appeal. Sometimes, courts also set a limit on the contingency fee an attorney can receive.
Contingency fees are not available for all cases. Lawyers often use contingency fees for their attorney fees only if the lawsuit has the potential to win a large sum of money. That's because an attorney might end up losing money in the transaction for a relatively small case due to the amount of money and time they need to invest in the case. In general, contingency fees are not used in business law settings. Further, lawyers may not be permitted to make contingency fee arrangements for some types of cases, such as criminal defense or child custody cases.
Retainer fees are essentially a deposit that you pay toward the total cost of legal services, not a separate additional fee. These fees make sure that the lawyer will get something in the end. Lawyers can also use retainer fees in exchange for being on call to handle legal issues whenever they come up.
The retainer fee is a set amount usually based on an hourly rate multiplied by a number of hours. The retainer you pay is generally put into a trust account. Then, the cost of the services gets taken out of that account as they accrue. Retainer fees are often non-refundable, though a court can deem this stipulation unreasonable and invalidate it.
Here is an article about retainer fees.
A statute or regulation may predetermine the amount a lawyer can charge for a given service in some jurisdictions. Common examples include bankruptcy and probate cases.
Written Attorney Fee Agreements
Attorney fees typically must be set forth in a written agreement, no matter the type of fee arrangement. These written agreements may be called representation agreements or retainer agreements. Regardless of the name, a written attorney fee agreement can help set the terms of the attorney-client relationship, providing a record of what you agree to pay in case a later dispute arises over legal bills.
Written agreements should cover a few key details, including:
- Retainer fee: If you will pay a retainer fee in advance, your written contract should clearly state the amount of the retainer as well as when you'll need to replenish the retainer.
If your lawyer charges an hourly fee, the written agreement should state:
- How often the attorney will bill you
- Details those bills will include
- How long you'll have to pay each bill
- Hourly rates for anyone who might work on your case
- Any discounts for early payments and/or penalties for late payments
- How you can dispute a charge
- Contingency fee: If your lawyer charges using a contingency fee, the agreement should cover the contingency percentage and collection process.
- Client and attorney responsibilities: The written agreement should detail the responsibilities of both parties, for example being forthright and honest.
- Agreement termination: The agreement should explain how to end the attorney-client relationship.
- Additional representation: The written agreement should explain whether the attorney will continue to represent you in case of an appeal or any other post-trial proceedings, like judgment collection. Here is an article about judgments.
- Responsible attorney: If you are working with a larger office, the agreement should state which lawyer will be responsible for your case.
- Costs of suit: The written agreement should explain how litigation costs will get paid.
Additional Fees and Costs
You should always make sure you understand the expectations for litigation costs and other additional costs not typically included in set attorney fees. Find out ahead of time how you will be required to pay for things such as:
- Copying costs
- Court fees
- Expert fees
- Deposition fees
- Fees charged by private investigators
- Messenger fees
- Travel expenses
If you pay using a contingency fee agreement, your lawyer may agree to pay these kinds of costs up front and then get reimbursed after you win your case. However, you will still need to pay back your lawyer for these costs should you lose. Other lawyers will just require you to pay these kinds of costs and fees as your case progresses.
No matter the type of legal issue you wish to pursue, you will want to work with an experienced lawyer who can help you achieve your goals. Understanding how attorney fees work prepares you to find the best possible lawyer for your needs.