Attorney Fees
“A lawyer’s time is his stock in trade.” –Abraham Lincoln
“A reasonable doubt for a reasonable fee.” — Old American Legal Adage
The approach to attorney fees vary within the areas of law in which I practice: family law, criminal defense, and civil litigation. Also, they vary among geographic locations, what I write here, however applies generally to the locations which I serve: the Bay Area including the Tri-Valley cities of : Pleasanton, Livermore, Dublin, & San Ramon, California.
This is the topic which creates much resentment about the legal profession. Jokes abound about lawyers who churn fees, pad bills, or will do anything for money. Like most humor, it is an outlet for anxiety, tension, or even hostility. Fortunately, most litigators, including myself, have very thick skins. After all, our work is usually unpopular with somebody. So, I’ve never known lawyer jokes to bother any litigator. Indeed, I must admit, a few have caused me to laugh loud and hardy.
I certainly do not intend to sway people from any beliefs they may hold about lawyers… talk about an insurmountable task. Also, this is, by no means, an exhaustive treatment of every issue relating to attorney fees. That would require quite a few gigs of space. The purpose of this discussion is to enlighten you and hopefully alleviate some of the tension or awkwardness should you discuss the subject of fees with a lawyer. Before I discuss attorney fees in chief, however, I offer some basic concepts which will get you and the lawyer on the same page. You may disagree with the concepts, but they exist, like it or not.
- Contrary to popular belief or urban folklore, lawyers are not obligated to give anybody free services or advice. That lawyers may do so far more than most other professions, does not change that. One should be as appreciative upon receiving such, just like if any other business gave one a freebie.
- As Abraham Lincoln set forth, TIME is what a lawyer sells. Thus, do not be shocked to learn that lawyers are going to charge you for their TIME, as do other professionals like your family doctor. Think of it this way, if you are an employee, would you expect your boss to deduct from your pay for the time you spent performing your duties on the phone? Deduct for the time you spent drafting letters? Of course, not. So, expect a lawyer to bill you for items like phone calls and letters.
- And here it comes…LAWYERS CAN BE EXPENSIVE. O.K., we got that out of the way. That said, you should not be dissuaded from seeking legal help.
Some of the more common fee arrangements are:
HOURLY FEES
The most typical way lawyers charge for time they spend on their cases is by charging an hourly rate. Most lawyers bill their time in fractions of an hour. Lawyers may bill in various time increments. Billing practices are not universal. That is, practices vary as to what items are billed. Some lawyers bill for reviewing a file every month. Some bill for attempted phone calls. Then many don’t bill for those types of items. Almost all lawyers bill for drafting documents, including letters and emails. They bill for time spent on the telephone and for time spent in consultations. Of course, they bill for time spent in attending court proceedings or depositions. Just to name a few commonly billed items. Some don’t bill travel time separately, but include it in their time for the task overall. Some lawyers charge mileage on top of travel time.
I do not charge for periodically reviewing a client’s files. If, however, a client hires me, after the case has been underway with another lawyer, then I do charge for the time to initially review the client file. I charge travel time, but not mileage. Most certainly, I charge for telephone calls, as well as e-mails. I charge for drafting documents, preparing for proceedings and attending proceedings. Also, I do charge for reviewing incoming material on a case, unless it is a brief blurb. This illustrates just a few, of many, common items of billing.
Let us not overlook how expenses are handled in an hourly fee agreement. Many lawyers charge, in addition to their hourly rate, for items such as: copying, faxes, toll calls, postage, and parking. I do charge for some, but not all of these items. I do charge for expenses for which I must pay to a third party for a client’s direct benefit. Such as: court filing fees, process server fees, transcript fees, expert’s fees, investigator’s fees or outside copy fees Virtually all lawyers charge for such items in addition to their hourly rate.
Then there’s the practice of charging for non-lawyer time or paralegal time. Many firms routinely charge for such, but at a rate less than the attorney’s rate, which is the practice at my firm.
My general rate, by the way, is $425 per hour depending on the nature of the case. In essence, my fees are less than most lawyers with my experience in the San Francisco Bay Area.
Now, before you whip out the calculator and enter: 425 x 40 x 52, don’t forget the overhead, as well as the amount of non-billable hours on items such as administrative tasks and continuing education. The law business is a business.
The billing items I mention are by no means exhaustive. I offer them to offer a point. Do not merely call a law office and ask: “How much do you charge?” or “What is your hourly rate?” Go meet with the lawyer and find out the lawyer’s billing practices. Believe me, it is quite possible that a lawyer with a lower hourly rate can have a final bill far greater than the higher priced lawyer. Then again, maybe not. Unfortunately, there is no easy way to predetermine such, except to get to know the lawyer and the lawyer’s billing practices.
Moreover, if you don’t get to know the lawyer, you may fall victim of the “Pen Syndrome.” You know, believing that if you pay $300 for a Mont Blanc pen, it just has to write better than a $5 pen. At times, the only difference between a lawyer charging $425 per hour and one charging $450.00 per hour — is $25 per hour.
CONTINGENCY FEES
Simply stated, this is where an attorney gets paid a percentage of a recovery. If there is no recovery, then there is no fee payment. That is, the attorney may work for hundreds of hours and not get paid. In California, just about any case can legally have a contingency fee except for divorces and criminal matters.
Typically, contingency fees are about 25% to 40%, but can range up to 50% if the matter is pursued to a complex trial and an appeal. Some laws or judicial practices put a cap on contingency fees. For example, most courts limit contingency fees to a 25% fee for a personal injury settlement for minors. There is also a cap regarding lawsuits against physicians. The obvious reason for that is to deter medical malpractice suits. Workers’ Comp is typically is 10% to 15% of the permanent disability award. Mind you, these reflect contingency fees common in California. Other states may vary.
Again, there is the matter of expenses or costs. Depending on the case, the client alone may pay the costs or the attorney and client may share the payment of costs upon recovery. What determines the pro rata sharing of the costs is the nature of the case.
A survey of lawyers who took contingency cases found that on the average they only accepted 46% of those presented to them. The lawyers with the most selective criteria accepted only 10%. Even those with the least selective criteria, accepted only 52%. So, don’t take it personally if a lawyer refuses to take your case on a contingency basis. I estimate that I accept about 20% of the contingency cases that come my way.
FLAT RATE FEES
Flat rate fees are a guarantee that the fee for certain legal work will be limited to a certain fee amount. Flat rates are often used to charge for drafting wills and trusts. Also, perhaps, incorporating or other transactional work. Though, flat rates are used in areas of litigation also. Criminal law lawyers frequently use flat rates. “X” dollars to the pretrial hearing, then “Y” dollars to trial. Or “Z” dollars to do a motion. It should be noted that some litigators mix hourly and flat rates together. For example, “X” dollars per hour, but a minimum of “Y” Dollars for attending a hearing.
Thus, you should feel free to explore the concept of a flat rate with a lawyer if it sounds to your liking. Though the lawyer will probably decline if its civil litigation. There are just too many variables to accurately predict how much such a case will totally cost Likewise, with family law. Uncontested divorces, however, are frequently done at flat rates, especially cases of, what in California are called, Summary Dissolutions of Marriage.
I pretty much follow the norms stated above regarding flat rate fees. Though, I do little transactional work.
RETAINER AGREEMENTS
A retainer agreement sets forth the scope of what the lawyer will do for the client and to what extent the client will pay for those services. For hourly fee cases, a retainer is the initial payment to a lawyer to secure the lawyer’s services.
A retainer agreement for a contingency case sets forth the percentage of recovery the lawyer will receive. Also, whether costs will be paid by only the client or by both the lawyer and client.
There are other common provisions in retainer agreements some of which are mandated by law. Be sure to ask the lawyer to explain anything about which you are unsure.
WHEN OTHERS PAY YOUR FEES
A consultation with a lawyer, even if you must pay for it, might be worth it to find out if you must pay for your attorney fees or somebody else may.
There are many laws whereby the opposing side must pay your attorney’s fees. For example, in civil rights cases and family law cases. Also, perhaps your contract or lease with the other party may state that the loser must pay the winner’s attorney’s fees. With most lawsuits, however, the parties each pay their own attorneys’ fees.
In the criminal area, if you cannot afford a lawyer the court will appoint one for you. If there’s a question about your inability to pay, frequently one will be appointed anyhow. Later though, there may be a court hearing to determine if you should pay for the court appointed lawyer.
In family law cases, the law mandates that the court ensure the parties have equal representation. So, it is quite possible that the court will require the higher earning party to pay some or all of the lower earning party’s attorney’s fees.
