Demystifying Attorney’s Fees
One of the biggest hurdles to climb when considering legal representation is usually the attorney’s fees. Attorney fee rates vary largely from not just one firm to another but also from one city to another. When it comes to hiring an attorney, false assumptions about their fees and associated expenses can have a detrimental effect on your case and be very costly to you. This makes it very important to ask the right questions and have a fair understanding of what to expect beforehand.
This article aims to demystify attorneys’ fees and also clear up some common misconceptions about it. You should expect to find key details regarding the difference between attorney’s fees and legal costs, and also some of the key factors that influence their rate of pay. The following should also ideally help you understand all you need to know in order to get the best value for your money when you hire an attorney.
Attorney’s fees vs Legal costs
It is important to understand that there is a difference between what you pay your attorney for their services and the wide-ranging costs that can arise during the course of your case.
Attorney fees refer to the attorney’s wage or exact amount billed for legal services rendered on behalf of a client. Regardless of whether the attorney charges a variable or fixed rate, these kinds of fees are pretty straightforward and designed to compensate the attorney and their law firm for the time spent working on the case.
On the other hand, legal costs or case costs typically refer to any other costs incurred by an attorney on your behalf. Costs like court filing fees, hotel costs, bail bonds, an expert’s fee, mediation costs, deposition costs, printing and postal costs, and even transportation costs in the course of a case would naturally fall under this category.
Types of Attorney’s fees
There are essentially two main types of attorney’s fees as shown below.
Fixed (Flat) Fees
Fixed fees are pre-determined from the start of the case and usually remain the same regardless of the length of the case. If you hire an attorney or law firm that charges a fixed fee for your case, you can expect to know much of your financial commitment upfront and not worry about unexpected payments. Contingency payments where you and your attorney agree on a fee based on the outcome of the case also fall within this category.
If you’re concerned about going out of pocket during your case or would like to stay in control of your expenses, you’d be better off with a fixed fee billing system. Experts have also acknowledged that more firms will adopt a fixed fee billing system in the future.
One of the key benefits of flat fees is that since you are paying the total legal cost upfront, you often save money compared to if you were paying them by the hour, as unexpected circumstances often arise during divorce. Flat fees can also allow you freedom to contact your attorney as often as you need without having to worry about how much it will cost you. Another benefit is that your attorney is unlikely to withdraw from your case should other expenses come up that you are unable to pay (mediation fees, other court fees, etc), as you’ve already compensated them. Instead, they will work with you despite your financial burdens.
Variable fees are usually in the form of hourly billing and can vary largely from one case to another. They can be very unpredictable as your attorney charges you for every time they engage with you, including emails and phone calls.
While an hourly billing system may appear to bill you for only time spent working on your case, the costs have a tendency of blowing out of proportion in lengthy court cases like contentious divorces. However, if you have a straightforward case, such as that of a couple without children, property, or any tangible assets, you might be best served hiring an attorney that bills hourly.
Factors Influencing Attorney’s Fees
It’s not unusual to wonder why attorney’s fees vary from one firm to another or why some are considerably more expensive to hire than others. While many states simply expect an attorney’s fees to be reasonable, there’s no recommended cap or limit as to what they can bill their clients.
The following are some typical factors that affect attorney’s fees across the US.
Experience and Expertise (Specialization)
Factors like annual training, certifications and even overall experience are highly influential in determining how much an attorney charges for their services. An attorney with more certifications or experience with certain cases will be more knowledgeable in these areas, and thus more expensive. In addition, these mandatory trainings, certifications and licenses are hardly ever cheap and as a result would need to be factored into whatever fees attorneys charge.
Furthermore, an attorney who specializes in a particular field like family law is more likely to charge higher fees compared to a general practitioner. Certification fees can also cost thousands annually which must be recouped by attorneys through the fees they charge.
Complexity of the Case
The more complex a case is, the more fees you should expect to pay your attorney. If your attorney bills you hourly, they’re likely to spend more time working on complicated cases and as such, you should be ready to pay more cumulatively. Similarly, for attorneys that charge a flat fee, there’s usually a consideration on how much time the case may go on for when deciding the fee.
Location based factors such as rent and cost of living play a huge role in determining how much an attorney is likely to charge for their services. An attorney in a town or city with low average income and standard of living will most likely charge a lower rate than one who operates from a higher income city. They will also set their rate accordingly to make up for the cost of renting their business premises.
Favorable outcomes record
Attorneys or law firms with a record of more favorable outcomes usually charge higher fees. This is often linked to them being specialists or having more experience than their counterparts.
Size of firm
The larger the firm, the higher the cost of running it. From having to hire paralegals to settling overhead costs, the main way of making up for these expenses is by charging fees that are commensurate to this.
If you’re considering hiring an attorney, having an understanding on how their fees work will not only help you minimize costs where possible but also avoid potential misunderstanding. All of the above items are important factors when choosing a lawyer, so make sure that you weigh your budget against the cost of what you would actually be getting from an attorney. Do they have a good case win ratio? Do they specialize in the practice area of your case or have any awards or certifications? Make sure you get the answer to all of these questions when trying to determine whether or not the price is right for your attorney.