|
||
In this Part 3 of this multi part article you will have an opportunity to read about the retainer fee, contingency fee and statutory fee. Please refer back to Part 1 and Part 2 of this multi part article to learn more about the other fees.
Retainer Fee - As the name implies, this fee is paid to the lawyer, often monthly or annually, to retain or keep the lawyer available to the client. It means that your lawyer would have to turn down other cases in order to remain available for you. As a result, you will probably be billed at a higher rate. This type of fee is called a true retainer and is often paid by large corporations to make sure they have access to their lawyers whenever they need advice or representation.
However, the more common type of a retainer fee is actually a down payment or a deposit. The client would put money into a special account, and the lawyer deducts fees as services are completed. The client is responsible for reviewing the account periodically. The legal fees will be subtracted from the retainer until the retainer is used up. Then, the lawyer will either ask you to pay another retainer or bill you for the additional time spent on your case.
Another way of using a retainer fee agreement is to have the lawyer be on-call to handle your legal matters over a period of time. Some legal work would be covered by the retainer fee while other legal services would be billed separately. Your lawyer needs to explain the details of your retainer agreement to you in advance, since there are several different types of retainer agreements. The retainer fee is usually non-refundable. Also, the unused money from this retainer agreement is usually refundable. Most attorneys require retainers for most kinds of cases. Make sure you ask your lawyer what your retainer agreement covers and what is refundable.
Contingency Fee - This type of fee agreement is commonly used for accident, personal injury, medical malpractice, workers' compensation and other cases involving a law suit for money. It means that you will pay your lawyer a certain percentage (usually one third) of the money you recover if you win your case or if you settle out of court. If you lose, the lawyer doesn't get paid. However, whether you win or lose you still have to pay any court costs and other expenses, such as the cost of expert witnesses. These expenses can be quite high. In some cases, the lawyer may use the money you receive from the case to pay some of these additional costs for you when they are due. But some lawyers will ask you to pay the expenses as they arise, since there is no guarantee that you will win your lawsuit.
Make sure you get the contingency fee agreement in writing and it must spell out the percentage the lawyer will get. Also, it needs to include whether this percentage is figured before or after costs and expenses have been deducted. In some cases, the percentage could vary depending on whether the case is settled out of court, goes to trial or has to be appealed. If so, those varying percentages must be stated in the agreement. You can try to negotiate an agreement in which the lawyer accepts a lower percentage. Lawyers settle most personal injury cases through negotiations with insurance companies before going to trial, which will require less legal work. No matter what, before you enter into a contingency fee agreement, your lawyer must explain all of the details relevant to your case and you must fully understand it to avoid any un-needed disputes after the fact.
Statutory Fee - For a certain legal work the cost is set by statute of law – hence the name statutory fee. This means that the lawyer's fee is either set or must be approved by the court. Your lawyer will let you know if your case would include statutory fee.
Summary of Attorney Fees
Regardless of which fee agreement is agreed upon between you and your lawyer, always ask to obtain a copy of the agreement. While only contingency fee agreements must be in writing, it is best for you to you have a written fee agreement for your case to avoid possible misunderstanding and un-needed disputes. Besides all the things mentioned up to now, your fee agreement must mention whether you're required to pay for related matters that may come up as a result of your case which are not covered by your agreement or may not be mentioned in the agreement. Also, depending on the laws in your state of residence, your fee agreement may have to state whether your attorney's fees are set by the law or they have been worked out between you and your lawyer.
For some cases it is impossible to know the time your lawyer would take to resolve your legal issue. For this reason you need to ask your attorney to estimate the cost and time that would take for your case and to include it in your fee agreement. Keep in mind that many unexpected factors may affect your case and the actual cost may be greater than the estimate. You may want to negotiate a limit on your total fees to protect you from these uncertainties.
If you have an hourly agreement, you might want to be billed weekly or monthly to give you a chance to review the services performed by your lawyer and to justify whether you're receiving a fair value. Ask your lawyer to provide in the bill a break down of the time spent on each task and to describe the work performed for each charge.
Don't be intimidated or afraid to talk to your lawyer regarding his or her fees or to push your attorney into disciplined routine of providing you with regular updates on your charges. Not all lawyers (as it is with people in general) are disciplined. And attorney fees as well as other legal fees are astronomical. Since these fees are coming out of your pocket, it is important that you deal with your lawyer openly and of course in a businesslike fashion until you are satisfied with the services rendered and his or her costs.
Other legal fees - covered in Part 4 of this article.
Disclaimer: The author and publisher of this article have done their best to give you useful, informative and accurate information. This article does not represent nor replace the legal advice you need to get from a lawyer, or other professional if the content of the article involves an issue you are facing. Laws vary from state-to-state and change from time-to-time. Always consult with a qualified professional before making any decisions about the issues described in this article. Thank you.
In addition to your attorney fees, you may be required to pay some or all of these extra expenses or otherwise referred to as legal fees:
- Filing fees,
- Per page or flat fee for word processing, photocopying and fax,
- Secretarial time,
- Overtime,
- Telephone charges,
- Courier, postage, and overnight delivery charges,
- Reporter charges for recording testimony and providing a written script of the same,
- Court fees and other court costs,
- Lawyer travel expanses, including gasoline, mileage, parking fees, meals, airfare and lodging,
- Expert and consultant fees,
- Investigator fees,
- Jury fees and mileage fees (set by law) if you request a jury for your case. These expenses must be paid in advance,
- Service fees for people who locate witnesses and other parties involved in the case and deliver legal papers to them,
- Witness fees and mileage charges for people who testify at depositions and trials. These amounts are set by law. You also may need to pay travel expenses if a witness must be brought in from far away,
- Other fees related to your case.
Make sure that you're not taken by surprise with any hidden costs or expenses. It would be wise to discuss them with your potential lawyer before you actually hire him or her. Also, you need to find out if you are going to be responsible for paying these costs directly as they arise or if you are going to have to reimburse your lawyer for these expenses that he or she may pay on your behalf. It would be in your best interest to ask for a written estimate of all anticipated additional costs. You can also determine a certain dollar amount and tell your lawyer that costs over that amount have to be approved by you in advance.
Your Legal Bill
Unless your case is under a contingency fee agreement, your lawyer would probably bill you monthly unless agreed upon otherwise between the two of you. As mentioned before, if you're paying your lawyer hourly, you may want to establish a cap or a limit at which your lawyer needs to get your permission before spending more.
When you receive your legal bill, you need to take your time going over it. You do have the right to get itemized bills that would show you how your lawyer has spent his or her time on your case. The bill needs to show your lawyer's fees and expenses with an appropriate explanation for each. For instance, if you've been charged 6 hours for a research time, your bill needs to spell out what exactly was being researched. If it doesn't, you need to ask your lawyer for specifics. If something seems suspicious, don't automatically accuse your attorney. Just give him or her a call and ask for an explanation. Even if it was a justified charge, this will let your lawyer know that you're paying a very close attention, which is totally within your rights.
You can get on a fee payment schedule. This is a monthly payment plan which allows you to pay an expected sum every month on the balance of your bill. But, be careful with this. In general the attorney would charge interest on the remaining balance. And that's more money out of your pocket. Many attorneys will arrange a fee payment schedule after they have received a retainer from the client.
And last but not least, lawyers are just humans as we all are. All humans make mistakes every now and then - lawyers too. Don't be afraid to pull out your calculator and check the math on your bill. If you find that the numbers are not adding up, simply bring it to your lawyer's attention. Anytime you think your lawyer's bill contains an error or something that you don't agree with, contact your lawyer immediately and try to resolve the discrepancy.
Not Being Able to Pay the Bill
If you cannot afford paying your lawyer's bill, contact your lawyer immediately (don't wait) to see if you can make any payment arrangements. You could ask your lawyer to postpone work temporarily until you can pay the bill. However, if you cannot reach an agreement, your lawyer may be entitled to stop working on your case. In some cases, your lawyer may acquire a lien on your house or property to secure their fee. So, it is recommended for you to come up with a plan on finding the funds necessary to pay your attorney.
Reducing Your Legal Costs
Time is money when it comes to legal fees. By answering your lawyer's questions fully and honestly, you will save time and also help your lawyer do a better job. Regardless of how embarrassing or how uncomfortable your answer is, by not providing your lawyer all of the needed facts, he or she would need to spend more time figuring out those details, which will cost you more money. Remember that the ethics of the profession bind your lawyer to maintain in the strictest confidence almost anything you reveal during your private discussions. So, by providing your lawyer all of the needed information, you will save a lot of time, which on the other hand will reduce your legal costs.
Also, offer your time. Let your lawyer know that you are willing to help out, such as picking up or delivering documents, making phone calls, faxing documents and such. Instead of paying for an overpriced hourly rate for someone else to do it, by you doing some everyday general tasks, you can reduce your legal costs tremendously.
Disclaimer: The author and publisher of this article have done their best to give you useful, informative and accurate information. This article does not represent nor replace the legal advice you need to get from a lawyer, or other professional if the content of the article involves an issue you are facing. Laws vary from state-to-state and change from time-to-time. Always consult with a qualified professional before making any decisions about the issues described in this article. Thank you.