How are a lawyer’s fees determined?

Honest and open discussions about fees will avoid misunderstandings. The rules of ethical conduct for lawyers state that all fees must be “reasonable.” Different lawyers value their time at different rates because of variations in experience, training, skills, and law office expenses. Lawyers usually bill for consultations (including phone consultations), meetings, document preparation, copies and correspondence, research of legal issues, representations in court, and for other work that directly relates to the case. You may also have to pay for the lawyer’s “out-of-pocket” expenses such as travel and court filing fees. You should carefully review all bills received from your lawyer.

There are several ways for a lawyer to bill for his or her service:
• Hourly Rate: this will vary depending on the lawyer’s experience and the complexity of the case. For example, an uncontested divorce can be expected to cost less than a divorce that involves disputes over property and child custody.
• Flat Rate: this will be the total cost of all services, a common fee arrangement for uncomplicated legal tasks such as simple wills or bankruptcy.
•Contingent Fee: this means that the lawyer will only receive compensation if you win your lawsuit and are awarded money. The lawyer should tell you exactly how much of your award, usually as a percentage, he or she will expect for the fee. These types of fees are typically charged in personal injury cases.
• Percentage Fee: this means that you will pay the lawyer a specific percentage of the disputed property, regardless of whether you win or lose the case.
• Fees Set by a Judge: In some cases, the lawyer’s fee can be determined by the court. An example of a fee set by the court is for the handling of an estate. In addition, certain types of cases allow a lawyer to request a judge to order an opposing party to pay for your legal fees.
• Retainer Fee: this is most often a deposit that you will have to pay in advance before the lawyer will begin work on your case. There are different types of retainer fees but typically a lawyer will withdraw funds from the retainer fee paid as he or she performs work on your case. The lawyer will typically ask for additional funds as the case progresses.

Certain types of retainer fees and all contingent fee agreements must be in writing. However, other fee agreements do not need to be in writing. Nevertheless, you should request and obtain a written fee agreement from your lawyer that describes the services the lawyer will perform for you, and the type and amount of fees you will be expected to pay. The agreement should also note how the other various costs and expenses of your case will be calculated. The lawyer’s billing practices and procedures should be explained, and whether interest or other charges will be added to any unpaid amounts. You may want itemized bills that show how the lawyer spent time on your case. As with any other contract, the agreement should be carefully read and understood before being signed, and all parties should keep a copy of it.