Ease the Fear — Know HOW and WHY Legal Fees Are Charged [VIDEO]
One of the things that has come up consistently throughout my career as an attorney is the universal fear of legal fees.
Everyone who needs legal services, for one reason or another, and regardless of the topic area, is always concerned about how much representation is going to cost them. That’s because most people assume that lawyers charge a fortune for whatever type of service they provide.
Today I would like to dispel some of that fear by explaining how and why lawyers charge fees, and how that relates to what you might pay (depending upon the type of service that you need).
There’s a famous saying by Abraham Lincoln that, “A lawyer’s stock in trade is his or her time and advice.” Many times that is what’s required to resolve a client’s matter. Besides advice, attorneys provide documents and their experience. Ultimately our time and advice, whether it’s in or out of court, is what we are selling, along with the experience that we have built up over the years.
So how do we charge fees in different types of cases?
- Flat-Rate Fee: A typical example of a flat-rate fee would be a simple sale or purchase of a single-family home. Once we learn the details, we’ll be able to furnish an estimate. Note: Sometimes there are additional costs that come up during the course of handling a real estate transaction, but we will advise you of that potential.
- Hourly/Retainer: If we’re unsure of how much time will be required to work a case, we use hourly billing and retainers. A retainer is an up-front deposit that comes with a written agreement, as well as a Clients Rights and Responsibilities statement. We then bill on an hourly basis against that retainer, deducting the hours we worked and accounting for them in regular invoices. If a client’s matter is resolved sooner than expected, the unused balance of the retainer can be returned to the client.
- Contingency Fee Basis: In personal injury matters, regardless of what type of case or injury, representation is always done on a percentage basis. Our fee — and every other attorney’s fee in New York — is one-third of what is collected. That is set by law. If we don’t collect the award, we don’t collect a fee. Whether it’s by settlement, arbitration, or trial, our fee is a percentage of what is recovered.
- Hybrid Agreements: The last way is a split between some of the methods above. For example, in cases like a discrimination case, lawyers often request an initial retainer amount that covers certain work upfront, and then a lawsuit might be handled on a contingency basis later on.
I hope I’ve shed some light on the “why” and “how” legal fees are charged in different types of matters. We’re looking forward to working with you and hope to hear from you soon.
James F. Leonick
Leonick Law, P.L.L.C.
TEL: (631) 486-9500