One of the first things many people consider when hiring legal counsel is how much it will cost. Understanding the basics of how attorneys charge for their services before meeting with one will help you ask the right questions and determine whether the services they will be providing are worth it so you get the representation you need.
Attorneys bill based on case type, complexity, and time spent working on the case. Depending on these factors, attorneys will utilize one or several different billing methods in their practice. Although you should always ask about the billing method at the initial client meeting, it is ultimately the attorney’s responsibility to inform their potential clients how they plan to charge them for their services.
Attorneys have several different billing methods to pick from, such as hourly rates, flat fees, retainers, contingency fees, and legal subscription services. We will break down the different methods below.
It is common for attorneys to use hourly rate billing. For this method, attorneys will keep track of the amount of time they work on every aspect of a file. From the initial client meeting to drafting documents and reviewing records. Notably, every six minutes of work done on a file count as 0.1 hours billed. The total time spent on a file will be multiplied by their hourly rate. An attorney’s hourly rate can depend on experience level and their area of practice. The attorney should advise you of their hourly rate at the initial consultation, if that is the desired billing method they wish to use.
Otherwise, retainer fees are often another starting point for billing. The method is generally used to cover upfront work. The retainer fee is based on the amount of time the attorney estimates they will spend working on the file. If the attorney does not end up billing for the entire cost of the retainer fee, then the client will be reimbursed the remainder. That said, if the attorney anticipates billing more than the retainer collected, after the file has been opened and worked up, the attorney should make sure the client is aware that they will be expected to pay more for their legal services.
Similarly, some attorneys use a predetermined flat fee. The flat fee is determined by the attorney, based on the amount of time and work it usually takes to complete the legal service requested by the client. The flat fee can also be determined based on industry standard as well. Generally, this method of billing is used by estate planning attorneys when they are drafting documents such as wills and trusts. During the initial client meeting, the attorney should explain the different flat rates that are charged depending on the documents the client is asking them to draft up and execute.
Additionally, for personal injury or criminal matters, attorneys may take a percentage of the settlement. The percentage is usually based on the type of case and can range from 10% to sometimes 45% of the final settlement amount. The percentage rate may also depend on what stage the case is settled at. Specifically, the earlier the case settles, the smaller the percentage rate may be.
In some cases, where an attorney will use percentage billing method, they may also work on a contingency basis. This type of billing method is based solely on the success of the case. This means, if the case does not recover any money, then the client does not owe their attorney for their services. When working with an attorney on a percentage basis, the client should be informed not only of the percentage but also of the odds the attorney believes their case may be successful.
Lastly, legal subscription services have gained popularity, especially in business law. This billing method offers ongoing legal support for a monthly flat fee. Generally, both parties will agree on predetermined tasks that the legal subscription service may cover.
In the end, there are many different ways an attorney can charge for their services, all of which have different uses depending on the circumstances of your case and legal needs. Whenever working with an attorney, make sure that you understand how you will be paying for their services.
McLario, Helm, Bertling & Spiegel, S.C.
N88 W16783 Main St.
Menomonee Falls, WI 53051-2890
Tel: (262) 251-4210