There are different types of fee arrangements that you can have with your attorney. The type of arrangement will determine how much you have to pay. Generally an attorney’s fee depends on many factors including the time spent on the case, the experience and reputation of the attorney, the facts of the case and the end result. The attorney’s overhead expenses can all affect the fees. For example an attorney operating from an office in Manhattan will charge you more than a lawyer operating from Windsor Locks, CT.
The common types of fee arrangements include:
Consultation Fee: The attorney may charge you an hourly fee or a fixed fee for your first meeting. Before you confirm the meeting, check to know the exact fee for the meeting. At this meeting, you must decide whether to continue with the attorney or whether to look for another one.
Contingency Fee: In this type of arrangement, the attorney will receive a percentage of the amount you receive from the court. If you lose the case, the attorney receives nothing but you must bear the legal expenses. The exact percentage will depend on your agreement with the attorney but generally the attorney may charge 1/3rd of the award. Contingency fee arrangements are common in personal injury and property damage cases. There are laws that prohibit such fee arrangement for certain matters such as criminal cases and child custody disputes. Generally contingency fee arrangements are not used in case of divorce matters or where you are being sued.
Flat Fee: This is basically a fee arrangement wherein the attorney will charge you a fixed fee for the case. This arrangement is common in simple and routine matters such as an uncontested divorce or a will.
Hourly Fee: Under this arrangement, the attorney will charge you on hourly basis. So if the attorney works for four hours on your case, you will be charged for four hours. This is the most common fee arrangement. While some attorneys charge the same amount per hour for any type of work, some attorney charge different hourly rates for different type of work. The more experienced attorneys tend to charge higher hourly rates than attorneys who are new to the practice.
Referral Fee: This is a fee arrangement between two attorneys. The attorney who refers a client to another attorney will receive a fee from the latter for having referred the client. In many states, this type of fee arrangement is prohibited.
Retainer Fee: Under this arrangement, the attorney is paid a set fee generally based on his or her hourly rate. The cost of the services provided are deducted from this fee as and when they accrue. The attorney will keep this fee in a separate account. Retainer fees are generally non-refundable unless a court declares it unreasonable. When a retainer fee is paid to an attorney, it means that the attorney is on call to handle legal issue over a period of time. Before you accept this type of fee arrangement, speak to the attorney and understand it clearly.
Statutory Fee: Sometimes the attorney fee is determined by statute or court rules. For example, bankruptcy or probate laws generally determine the fee that can be charged by an attorney in such proceedings.
In any fee arrangement, you must find out what is covered by the fee and what is not. Sometimes besides the attorney, there may be other staff from the attorney’s office working on your case. You should find out whether the fee includes the fees of the staff. In contingency fee arrangement, find out if the agreed fee includes or excludes the expenses.