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A potential client should always consider finances. If a client's
financial resources are limited and she does not face a devastating
loss in a case, she may wish to consider an attorney who charges
moderate fees. Even if a case poses the threat of financial
destitution or, in a criminal case, loss of liberty, a client may
prefer an attorney with moderate rates. The best representation does
not always come from the attorney charging the highest fees.
Nonetheless, attorneys operate in an open market, and an attorney's
rates tend to reflect his or her reputation, resources, and previous
success.
Attorneys also vary in their fee arrangements. The most common
forms of billing include flat fees, contingent fees, retainer fees,
hourly rates, and variable contingent fees.
Flat
Fees
A flat fee is a dollar amount that the attorney
and the client agree on before the attorney begins work. Many
attorneys favor the flat fee because it is a simple transaction and
because the fee is paid up front. The attorney identifies an amount of
work that the case will require and calculates a reasonable fee based
on the time and effort involved. If the attorney spends less time on
the case than anticipated, he may keep the excess fee amount, unless
he and client agree otherwise. However, if the attorney charges a flat
fee and the case requires more time and effort than originally
anticipated, the attorney may not later demand more money.
"As a general rule, the few criminal defense lawyers
who specialize in the area of criminal law, as I do, representing
those targeted by the criminal justice system, work on a flat fee
basis. The fees are out front, agreed upon,
and never change no matter how many times you need or want to
consult with me, no matter how many court appearances are
necessary to get a good result and no matter how long it takes for
you to be comfortable with my advice, explanations. and the
process" The flat fee is usually split
into two divisions. The first is a fee that encompasses the
case up to the trial date - (but not including trial
preparation). The second is a trial fee for the preparation
of, and if necessary, the actual trial of the case. The fees
are separate so that you are charged a reasonable fee only
for the work that is done on your case." H. Michael Steinberg
Hourly
rates:
An hourly rate is a predetermined amount
chargeable for the attorney's work. The attorney and client may agree
that these fees be paid periodically or in one lump sum at the end of
the case. The time that an attorney charges for legal work is called
billable time, or billable hours. Hourly rates vary according to the
attorney's expertise and experience. Some critics have argued that
hourly rates discourage quick work and expedited resolutions. Before
agreeing to payment of an hourly rate, prospective clients should ask
for a written estimate of the number of billable hours that the
attorney anticipates will be necessary for the case.
Contingent
Fees.
A contingent fee represents a certain
percentage of the recovery in the client's case. For example, a
typical contingent fee might be about one-third of the recovery in an
action for personal injury. Attorneys use a contingent fee when the
client seeks money damages. Contingent fees cannot be used in divorce
cases, child custody cases, and criminal cases. The client does not
pay a contingent fee until she or he wins money damages from the
defendant. An attorney will offer such a fee if the client stands a
good chance of winning a sizeable cash settlement or judgment.
Contingent fees are a gamble for the attorney. If the client does
not win the case, or wins less than anticipated, the attorney may work
for little or no pay. Contingent fee percentages vary from case to
case. Common contingent fees range from 20 to 40 percent of the
client's recovery. For personal injury and medical malpractice cases,
laws in all states place limits on the percentage that an attorney may
receive from a client's recovery. The law does not place a limit on
contingent fee percentages for other cases, in which the figure is
negotiable between the client and attorney.
Sometimes an attorney will mix a contingent fee with a flat fee or
an hourly rate. Another common practice is to base the contingent fee
on a sliding scale. A sliding scale contingent fee provides that the
attorney receives a high percentage of the client's recovery if the
recovery is large and a lower percentage if the recovery is small.
Retainers:
A retainer is either a continuing flat fee or an
advance on the fee owed for the attorney's services. Corporations and
wealthy individuals usually use a continuing flat fee retainer. In
return for a regular payment, the attorney agrees to be available to
handle the client's day-to-day legal affairs. Most individuals do not
have enough legal concerns to keep an attorney on retainer.
The term retainer also refers to an initial fee paid by the
client. Attorneys who charge an hourly rate usually use retainers, but
some attorneys add an initial retainer to a contingent fee.
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