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The Different Types of Legal Fees, Explained
It’s no secret that legal fees can add up fast. This article will help you understand exactly what you’re being charged for, so you can budget better.
Is there anything worse than getting an unexpected bill in the mail? How about thousands of dollars in legal fees that you can’t afford?
While you never hope to need a lawyer, you may find yourself in an unexpected legal dilemma at some time in your life. But it doesn’t mean you have to go bankrupt getting the help you deserve.
Don’t get blindsided by legal fees. Instead, arm yourself with information.
Read the guide below to learn about different types of legal fees you might be asked to pay for legal representation.
Types of Legal Fees
When you work with a lawyer there are different types of legal fees or bills that you are expected to pay. Usually, the types of attorney’s fees are explained during your first official meeting or a free consultation.
When meeting with an attorney for the first time you can ask what amount of money they charge. They should be able to explain to you the billing process they use.
Now to move on to the main question at hand – what are the types of fees lawyers charge?
The terms below will explain attorney fees and what to expect from each type.
Consultation Fee
As mentioned above, some attorneys will offer a free consultation to hear about your case. Other attorneys will charge a one-time fee for the consultation. The amount may be predetermined or it could be an hourly rate. Before meeting with an attorney for a consultation, ask how much the consultation costs.
Consultation fees can vary from $100 to $300 depending on the attorney. If you are uncomfortable with the consultation rate, you might consider seeking out more affordable representation. If you need help paying for your legal fees there are lawsuit funding groups that can help.
Hourly Rate
Many attorneys charge legal fees based on their hourly rate. However many hours they spend on your case is multiplied by their hourly rate, and that’s how much you owe.
Hourly rates vary widely and it’s difficult to budget for because you don’t know how many hours your lawyer will work on your case. You can always ask for an estimation, but if it goes over that amount – you’re out of luck, and maybe out of savings!
Sometimes lawyers will charge different hourly rates for different tasks. So, individual meetings with your lawyer might cost $200 an hour but the time spent on filing paperwork could be $150 an hour.
Don’t be fooled by a low hourly rate. It doesn’t necessarily mean that your total bill will be lower. Sometimes more experienced lawyers will have a high hourly rate but they won’t need as many hours to complete the work.
Flat Fee
Have you ever gone to the post office and seen the flat rate shipping boxes? Well, the same principle applies to a flat fee for an attorney. They charge you one price regardless of the time they spend on the case.
A flat fee can give you peace of mind, but it’s rare to find attorneys that bill this way. Sometimes in simple cases like the execution of a will, an attorney will charge a flat fee.
Retainer Fee
By now you are starting to understand the differences between different legal fees. But retainer fees are a little more complicated. A retainer fee is usually one large sum of money paid by the client to the attorney. As the case continues, the attorney takes money from the retainer fee.
The amount of money the attorney takes is usually based on their hourly rate and number of hours worked. At the end of the case if there is money leftover the attorney may keep the money or they may refund you the rest. If you pay a retainer fee be sure to ask your attorney whether you’ll get any money back that isn’t used.
A retainer fee could also be paid to keep a lawyer “on-call” for a person or business. The client and attorney decide on a specific amount of time when the attorney’s services might be needed and that is how long the lawyer is expected to be ready to work.
If your lawyer asks for a retainer fee and you don’t know if you have enough money, look into the possibility of a cash advance on your lawsuit.
Contingency Fee
A contingency fee is a percentage of an amount of money paid to an attorney based on the amount of money recovered, or “won”, during a case. You might encounter this type of fee in a personal injury lawsuit, such as a car accident.
The attorney and the client will work together to decide on the percentage of money the attorney will get. This percentage could be anything. If an attorney is confident that the client will recover the money, they might take a smaller percentage. But if they are unsure of the outcome, they might ask for a larger percentage.
The contingency fee also depends on the amount of money that the client might recover. If the client could recover $500,000, the contingency fee might be lower than if they could only recover $5,000.
So, if a client and her attorney decide on a 25% contingency fee and the client recovers $10,000 the attorney will get $2,500.
Statutory Fee
A statutory fee is decided by a court or statute (law). The client will pay a set amount based on the rules and the particular case. Statutory fees are common in bankruptcy or probate cases.
Need Help Covering Legal Fees?
By now you might be thinking, how many kinds of legal fees are there? The list above includes most of the common legal fees you will encounter when working with a lawyer.
Remember to ask your lawyer about the type of fees you can expect before agreeing to work with them. Don’t agree to anything before you set a budget.
And if you need help paying for your legal fees, contact us online or call us at (877) 571-0405. We are standing by to help you pay for your legal representation.
