There are several methods for covering legal fees, each with its own advantages and drawbacks. By familiarizing yourself with these various options, you can identify the most suitable approach for managing the costs associated with retaining legal representation.
Retainer
It’s common for lawyers to ask clients to pay some money ahead of starting work on their case. This helps the lawyer make sure the client can pay for their services. As the case progresses, the lawyer will send a bill for the work done and take money from the initial payment. If the money runs low, the client will need to add more, or the lawyer may not be able to keep helping. The lawyer-client agreement letter has more details on how this works. If there’s money left in the initial payment after the case is over, it will be given back to the client. The issue with initial payments is that not everyone has a lot of money to put down. In that case, clients should ask about flat fees or services that are paid for separately.
Flat Rate Agreement
After working as an attorney for a while, you start to have a good idea of how much time different types of cases will take. That’s why it can be easier to just offer a fixed price. Clients might like this because they know exactly how much they’ll have to pay, instead of the uncertainty of a retainer. Some attorneys also let clients pay off the fixed amount over time. This means clients don’t have to come up with a lot of money upfront, like they would with a retainer. For my firm, I’ve found that fixed fees work well for estate planning, probate, simple criminal misdemeanors, and sometimes family law cases. However, I usually don’t use fixed fees for divorce cases because it’s hard for me to predict how much time they’ll take. For divorces, I might ask for a retainer or offer a different kind of representation.
Unbundled Representation
Unbundled representation is like a flat fee agreement, but it’s for only a part of a case, not the whole thing. For example, unbundled allows a client to hire an attorney for specific parts of a matter like legal advice, document prep, document review, or limited court appearances. The client and attorney decide on the tasks, and the attorney only does those. I would suggest full representation whenever possible, as it can be hard for a lawyer to jump in and handle just a part of a case. I also think there are benefits to a lawyer working on a case from start to finish. But this is a good choice for people who can’t afford full representation.
Contingency Agreement
Under a contingency fee structure, the attorney will only get paid if they are successful on your behalf by obtaining 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 aspect 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 suitable for areas of law such as Personal Injury. In general, my firm does not handle contingency cases.
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All of these options are available through my office. It’s crucial that the attorney-client agreement clearly outlines the scope of representation and payment terms, regardless of the option you choose. Feel free to reach out to my office if you have any questions.
Luke D. Larson
Managing Attorney at Legal State of Mind
Website: http://www.legalstateofmind.com
Email: luke@legalstateofmind.com