Attorney’s fees and how attorneys charge their clients are some the
most misunderstood part of the legal representation. Why one attorney
charges $1500 and another charges $3000, for seemingly the same matter,
is often confusing. Some people assume that the $3000 attorney is gouging
the prospective client, while other people will see the lower fee and
say “you get what you pay for”, which may be poor quality,
service, or results. You should always ask your attorney about their legal
skill set and background before retaining their services. If the attorney
is insulted, that attorney may not be a good choice. Also, be sure that
they appear to be providing the level of service your desire, and that
your personalities are compatible; it is all necessary for the client
to be satisfied. Although sometimes inaccurate, web-sites reviews to see
whether other clients were satisfied with their legal representation.
How we charge our clients at
Richard A. Heller, P.A., and the estimates we provide, are based upon a number of factors that
are listed below.
Types of Attorney Fees:
Hourly Fees: This type of attorney compensation uses a rate structure where the attorney
will bill the client based upon an hourly rate. (eg. 2.5 hours of time
at $300 per hour is a $750 fee.) The attorney may also use an hourly rate
for secretarial time and that of a paralegal. Attorneys have the right
to charge whatever hourly rate they feel is appropriate, but it cannot
be clearly excessive. In determining the hourly rate, the attorney should
base it upon their experience, location, operating expenses, and even
education. An attorney in New York charging $450 per hour may be common,
where in Orlando an attorney may charge $250-$350 per hour. An attorney
out of law school may charge as little as $150 per hour as opposed to
an attorney with a great deal of experience that will charge $350 per
hour. Many people may choose the attorney out of law school because the
representation is less expensive on its face. However, you will also be
paying for that attorney’s learning curve, and it may very well
cost you the case, in which case you have wasted a great deal of money.
An experienced attorney may know an answer off the top of his head for
which he may not charge. Whereas a less experienced attorney may spend
an hour or two researching the issue. Depending upon the representation
agreement, the attorney may prorate the hourly fee. What you need to know
about hourly fees is that every time you pick up the phone to speak with
the attorney, send or receive an email, the attorney does research, writing,
or makes a court appearance, you are being billed.
Contingency Fees:This type of attorney compensation is typically used where the attorney
is offering to accept representation, contingent upon an outcome where
there is a settlement or a verdict in the client’s case awarding
them damages. Normally, all personal injury attorneys use this form of
compensation as it is very lucrative, typically ranging from 25% to 45%
of the recovery through an appeal. The clients accept such a high legal
fee because they do not have to pay any money unless they prevail. Contingency
fee contracts by law cannot be used in certain types of legal matters,
such as in family law cases, with few exceptions, even if it is to collect
past-due child support. This type of fee arrangement will also not be
used in most transactional type matters including estate planning, real
estate transactions, contracts, and the like.
Fixed Fee: This type of attorney compensation is often used where the attorney, through
knowledge and experience, can estimate the time necessary to complete
the representation. The attorney will then charge a set fee which the
client will often pay up front, or possibly in installments. If the attorney
is able to complete the work in less time, it is to the attorney’s
benefit. If it takes the attorney longer than anticipated, then the client
has shielded themselves from additional fees and may have saved a great
deal of money. Fixed fees are typically used in preparing documents, simpler
court related matters, and some types of transactional work.
Statutory Fees: For some types of legal matters, the legislature or the courts have specified
what is presumed to be a fair and appropriate fee for a type of legal
matter. This does not necessarily mean that the attorney must charge that
amount, but if they do, the presumption is that they are charging the
client a fair fee. Such matters using this type of fee structure are probate,
bankruptcy, social security, and personal injury for contingency fee matters.
Consultation Fees: Many attorneys will charge a consultation fee. A consultation fee is when
you are meeting the attorney, often for the first time, and explaining
your legal predicament, or the legal matter for which you need representation
or assistance. An initial consultation is not to give hard advice, review
voluminous legal documents, or research a matter. It is to let the attorney
know your problem or concern, in sufficient detail, where the attorney
can provide options for you and the estimated cost for representation,
if the attorney were to accept representation. If we cannot provide you
with assistance, we will endeavor to provide the name of an attorney or
resource to find appropriate representation.
The Retainer Fee: This is an amount of money that is paid to the attorney upon being retained.
It is usually used in connection with an hourly fee or fixed fee type
representation. The attorney will bill against that amount of money until
it is exhausted, after which, depending upon your contract with the attorney,
you will have to pay an additional retainer or simply be billed for the
balance. An initial retainer fee may be refundable or nonrefundable. If
it is nonrefundable then it is considered a fee that is earned upon representation,
although future billing will still be used against that initial retainer.
If the fee is refundable, then the fee is placed into an attorney’s
trust account and will be billed against as fees are earned.