Appendix B: Understanding Attorneys’ Fees

There are three basic types of attorneys’ fees that typically are charged for professional legal services:

1. Hourly fees
2. Set fees
3. Contingency fees

An hourly fee is just what it sounds like, a fee charged for services performed, measured at an hourly rate. Hourly rates vary by type of legal services provided, skill and reputation of the attorney, and region. Rates generally range from $75 per hour up to $400 per hour (the higher rates are normally charged in the larger urban areas).

A set fee is a total fee quoted for the entire representation. It may be paid all at once up-front or, if the attorney agrees, in partial payments over time. Criminal case fees are generally paid up front in one payment. Occasionally, criminal fees may be stretched out over several months, but for obvious reasons, a criminal case client is usually required to finish paying his or her fees before the attorney will appear in court on the case. The attorney knows that a client who is incarcerated is highly unlikely to finish paying his fees, and the attorney would have a difficult time enforcing collection as well.

A contingency fee is one in which the payment is contingent upon the attorney making a successful recovery of money damages. Contingency fees are most commonly used in personal injury cases. While the percentage varies, the standard contingency fee is one-third of the recovery.

Typically, the attorney also advances costs in a contingency-fee case that are later subtracted from the proceeds recovered.

A retainer is simply a deposit of hourly fees that an attorney typically receives from the client and deposits into his trust account then periodically withdraws payment of his fees from as he earns them. In years past, some attorneys would charge non-refundable retainer fees, but the modern trend is for retainer fees to be refunded.

People involved in legal disputes often want to make the opposing side pay their attorney’s fees. However, the general rule is that each party must pay its own attorney’s fees. The exception to this rule is where a contract or statute provides for it; for example, when a judge awards the winning side in a domestic case attorney’s fees from the losing side.

Large businesses usually include an attorney’s fees provision in their contracts. For example, banks and financing companies typically include a provision in their contracts that allows them to recover attorney’s fees for having to pursue collection of the loans. Many of the statutes that give wronged parties the right to sue for civil damages will also provide for recovery of attorneys’ fees. For example, most consumers’-rights statutes allow wronged consumers to recover attorneys’ fees if they prevail.

You should have any fee agreements with an attorney in writing. If you are being charged at an hourly rate, then you should request regular statements of your account so you are not surprised at the end of your case by a large bill. Ultimately, what everyone should want is to get competent representation for a fair fee. Neither party should receive a benefit that it is not entitled to receive.