You suddenly find yourself in the middle of a complex legal matter. Naturally, the first step is to hire an attorney, especially someone skilled, knowledgeable, and experienced in the legal area you need help with—whether that is family law, business law, personal injury, or another practice area. But you cannot help but wonder how they will charge for their legal services and how that fits your budget.
We cannot blame you for having these questions. While qualified legal representation is imperative to achieving the best possible outcome, it can become a significant investment. Attorneys also use different billing methods depending on the case and their model.
It is impossible to say precisely how much your unique legal situation will cost from start to finish (after all, there are so many variables associated with each case that it is impossible to determine how much a case would cost or how long it will take). That said, attorneys generally charge for their legal services in four common ways.
Understanding these methods can help you make an informed decision and budget accordingly.
(Editor’s Note: This is the first in a short series of blog posts on legal pricing. We aim to educate individuals, families, and business owners about legal pricing, why attorneys and firms charge how they do, and how it benefits the client).
4 Common Ways Attorneys Charge for Their Legal Services
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Hourly Billing
We would venture to say most experienced and client-focused attorneys charge hourly for their legal services. With this pricing structure, you pay for each hour or fraction of an hour the attorney spends on your case. Rates can vary significantly, from as low as $150 an hour to as much as $500 to $1,000 per hour, based on the lawyer’s experience and the complexity of the legal issue. While this pricing structure may seem overwhelming, the reality is that most cases (divorces, contested child custody, business representation, business litigation, etc.) require ongoing legal advice, unpredictable time commitments, and a litany of uncontrollable variables.
Hourly rates ensure quality representation without the attorney having to worry about time limitations or the client worrying about whether they are being represented to the fullest. Examples of variables that can be covered through hourly billing include:
- The complexity of the legal issue
- The amount of needed information that is known or in the possession of the client
- The level of cooperation between attorneys in the exchange of necessary information
- The reasonableness, or lack thereof, of the positions taken by the parties
- The level of cooperation or availability of the client
- The length of time and action necessary to obtain required information from opposing or third parties
- The number of court appearances
- Whether mediation is required
- The number of parties involved in the litigation
- Judge and court availability
- Protracted settlement negotiations
- Whether there is an appeal during or at the end of the case
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Contingency Billing
You will see contingency billing options in personal injury cases (car accidents, medical malpractice, etc.). With this arrangement, the attorney’s payment depends on the outcome of your case. In essence, you pay nothing upfront because the attorney believes liability is clear and that they will win in court and collect from the at-fault party. Once the settlement or award is paid, the attorney takes a percentage of the total amount and reimburses themselves the cost incurred during the proceeding. That percentage should be made clear before they take your case so everyone is on the same page.
Contingency fees can be an option if the client cannot pay upfront out of pocket but has a strong case with good damages.
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Modified Contingency Billing
While rare, modified contingency billing can come into play in cases where liability is clear, but collectability is questionable. In other words, the attorney believes they can win the case for you, but there are questions about whether the at-fault party will pay. With this arrangement, you generally pay a nonrefundable retainer for the attorney to take the case, a reduced hourly rate, and/or a separate contingency fee if you win the case and collect money.
You and your attorney share some risks with this legal pricing model while keeping legal services accessible.
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Flat-Rate Pricing
With flat-rate billing, the attorney you hire agrees to do X amount of work for a specific amount. While this sounds attractive for many would-be clients on a budget, it is typically only made available for straightforward legal tasks where the attorney can predict within a reasonable degree of certainty the number of hours it will take to handle your legal matter. Examples of such issues can include:
- Drafting a Will, Trust, Prenuptial Agreement, etc.
- Reviewing contracts
We caution you against working with any attorney who offers flat-rate billing for divorces, civil litigation cases, and other complex legal matters. The reasons for this will be outlined later in this special blog series.
Call Nelson Law Group Today!!
If divorce is the answer, you need an advisor to guide you through each stage and help you deal with the fears that naturally come with that. We work diligently to achieve a result that ensures you receive what you are entitled to as you move forward onto the next stage of your life. The Nelson Law Group brings nearly two decades of family law experience to every case.
Give our knowledgeable staff at Nelson Law Group, PC, a call if you have any further questions. Our staff is always available. Give us a call today! For more information about Brett A. Nelson, click here.
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Source: Nelson Law Group