Lawyers may be retained under a variety of different payment arrangements. Understanding those payment options is an important part of interviewing lawyers and finding the right fit for you.
Contingency Fee Arrangements:
Contingency fees are not paid to the lawyer until the lawyer wins your case and recovers money for you. These fees are generally calculated as a percentage of the total amount recovered and require no up front payment to the lawyer. This kind of fee arrangement is most common for personal injury cases, but it can also be appropriate for cases to recover past due child support an spousal maintenance. It is important to pay attention to how the contingency fees will be calculated, including the percentage that your lawyer will receive, and whether expenses are reimbursed from the total before the lawyer takes his or her share, or if the expenses are reimbursed from your share alone. Some personal injury lawyers will charge contingency fees of 50% of the total recovery, or more!
Contingency fees are not permitted for divorce or child custody cases
Hourly Fee Arrangements:
These arrangements are most common in divorce and child custody cases, as well as civil litigation defense. You generally will be required to deposit a retainer with your lawyer in order to secure the lawyer’s services. This retainer doesn’t go into your lawyer’s pocket, instead it goes into a trust account for your benefit. Depending on the specific terms of your agreement, your bill may be paid out of the retainer each month, and/or you may be required to maintain your retainer balance and pay each month’s bill as it comes due. This distinction can often impact how much of a retainer you are required to deposit. Ask your prospective lawyer any questions you have about the payment agreement and what is expected.
It can sometimes be difficult to come up with enough money to pay the required retainer. You should feel comfortable talking to your prospective lawyer about payment plans and alternative arrangements that may help you pay for your preferred lawyer. Additionally, in some divorce and family law cases your lawyer may be able to compel the opposing party to pay your future attorney fees, or reimburse you for fees you have already paid. Call me for a free consultation to talk about how attorney fees can be addressed in your case.
Flat Fees:
Flat fee arrangements provide for a specific fee for a specific legal service, regardless of the number hours your lawyer spends on the service. This is a common fee structure for criminal cases, demand letters, basic wills, contract review, and some other matters. This arrangement is traditionally not suitable for divorce and child custody cases, but recently there have been several national and local law firms that have been offering flat fees in divorce/custody cases for “Limited Scope Representation.”
Limited Scope Representation often requires a flat fee for a specifically defined portion of your case. It is important to know that in many of these arrangements you are NOT hiring a lawyer to help you with your entire case. This can be useful for people who are comfortable handling most of their case on their own and only need help with a certain specific part of the case, like drafting a Separation Agreement or attending mediation with you. The costs of Limited Scope Representation can quickly spiral higher if you end up needing help with multiple parts of your case, and often hiring a lawyer on an hourly basis can provide more efficiency and value. Always make sure you ask questions and fully understand the costs and scope of your lawyer’s representation to avoid costly mistakes or misunderstandings. Don’t be fooled by low introductory legal fees that don’t provide the representation you need.
Call me, Alex Musz, at (303) 351-2533 for a free consultation about your case.