There are various ways in which legal fees and costs
of hiring an attorney can be paid. Some options may work better for others. Understanding
the various options will help you find a way to afford the cost of hiring an
attorney.
How Does a Retainer Work?
It is not uncommon for attorneys to request that a
client put up upfront money before the attorney begins work on a client’s case.
This helps ensure the attorney that the client will be able to pay for their
services. As representation goes along the attorney will send out an invoice
for work done and deduct funds from the retainer. The retainer will need to be
replenished if funds run low, and the attorney may not be able to continue to
represent the client if there are no longer any funds. The attorney client engagement
letter provides more details about how this might work. If there is money left
over in the retainer after representation is completed the funds will be
returned to the client. One of the problems with retainers is that not all individuals
have a large amount of upfront money to put in a retainer. If that is the case,
a client should ask about flat rate agreements or unbundled services.
How do Flat Rate Agreements Work?
After awhile an attorney tends to get a sense about
how much time they are going to spend on a certain type of case. For this
reason, it is sometimes easier to just offer a flat rate price. Clients may
prefer a flat agreement because they have a fixed understanding of what their
legal needs are going to cost, avoiding the unpredictability of choosing a
retainer. Additionally, some attorneys will allow clients to be on a payment
plan to pay off their flat rate amount. Therefore, unlike a retainer they are
not initially required to put up a large amount of money. For my Firm, I have
found flat rate fees to be best suited for estate planning, probate, simple
criminal misdemeanors, and occasionally family law cases. I usually do not
allow flat fees for divorce cases because it is difficult for me to predict how
much time I am going to spend on the case. Therefore, for divorces I may
require a retainer or some form of unbundled representation.
What is Unbundled Representation?
Unbundled representation is a form of a flat fee
agreement, but it typically addresses a portion of a case instead of the entire
case. For example, unbundled attorney services refers to situations in which a
client hires an attorney to assist with specific elements of a matter such as
legal advice, document preparation, document review and/or limited court
appearances. The client and attorney agree on the specific tasks to be
performed by the attorney and the client hires the attorney to perform only
those specific tasks. The attorney may or may not enter an appearance with the
court. When possible I would always recommend that a client go with full
representation, as it is sometime difficult for a lawyer to jump in and only
handle a small section of a case. I also think there are advantages of a lawyer
working on a case from beginning to end. However, this is a good option for
individuals who do not have the money for full representation.
How Does a Contingency Agreement Work?
Under a contingency fee structure the attorney will
only get paid if they are successful on your behalf by getting a settlement or
judgment through trial. It is not uncommon for the contingency percentage to be
around 33% increasing up to 40% if a trial is required. The positive of such an
arrangement is that a client is able to retain an attorney without having to
put up any upfront costs. Such arrangements are more fitting for areas of law
such as Personal Injury. In general, my Firm does not do contingency cases.
Conclusion
Hopefully, this helps clarify any confusion about
the payment of attorney services. All the above mentioned options are
possibilities through my office. Not all attorneys provide these options
though. It is important that no matter what option you choose the attorney
client engagement letter is clear about the scope of representation and how
matters are to be paid for.
Let me know if you have any questions.
Luke Larson (Managing Attorney at Legal State of Mind)
Website: www.legalstateofmind.com
Email: legalstateofmind.com
