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    There is no question about it legal services are expensive. Understanding how legal services are billed can help you control costs and prevent nasty surprises.

    When you first talk to an attorney about the legal matter that you would like him or her to handle for you, after you describe the nature of the matter, ask how the attorney proposes to bill you. There are three main types of fee arrangements:

Hourly fees. This is the most common fee arrangement. The attorney will bill you for every hour or fraction of an hour that he or she performs services for you. Hourly rates typically run from $125 to $450 (or even higher). Attorneys with many years of experience, or who practice in a metropolitan area, or who have particular expertise in a legal area, will charge at the higher end of the scale. In addition to knowing the attorney's hourly rate, you need to know what fraction of an hour the attorney typically uses for billing. Today, most attorneys bill by the tenth hour (i.e., in six minute increments), but some bill by the quarter hour. You may pay less if the attorney bills by tenth hours; an attorney who bills by tenth hours and spends 12 minutes on your case will bill you for .2 of an hour, but an attorney who bills by quarter hours will bill you for .25 of an hour for those same 12 minutes. Over time, such small differences can add up. Note that under hourly fee arrangements, you will pay costs, such as long-distance telephone charges and deposition expenses, in addition to the fees. It is perfectly reasonable to ask the attorney for an estimate of the number of hours it will take to handle your legal matter.

Flat fees. Flat fees are best suited to uncomplicated, routine matters such as drafting wills and handling uncontested divorces. Typically, the attorney will tell you up front what the total fee will be for the legal services you require. Be sure that you understand whether the flat fee quoted includes costs or is limited just to fees. Costs can add hundreds or thousands of dollars to your bill. Also, be sure you and your attorney will discuss what will happen if your legal matter turns out not to be as straightforward as it initially seemed.

Contingent fees. Certain types of cases can be handled on a contingent basis whereby the attorney will get his or her fees only if you win. Contingency fees are not available in all types of cases; for example, attorneys typically cannot defend you in a criminal matter or represent you in a divorce on a contingent fee basis. Typically, the attorney will take as fees between 30 and 45% of any money that is recovered for you. As with hourly fees, you will be responsible for all costs as well, which will further reduce the amount you receive from a settlement or verdict in your favor. Note that even if you do not win, you will still be responsible for costs. Contingent fees can be tricky, so be sure you understand exactly what the attorney is proposing. What will constitute a win that will entitle the attorney to fees? If you are entitled to have the other party pay your attorney's fees, either pursuant to a statute or a contract, how will that affect the contingent fee arrangement? If you become dissatisfied with the attorney's services and decide to hire another attorney, what will happen to the contingent fee?

    After you have heard the attorney's proposal for charging you for fees and you understand it, you should feel free to offer a counterproposal. Hourly rates are occasionally negotiable, or you may be able to negotiate a different type of arrangement. If you need the certainty of a flat fee but the attorney is unwilling to agree to a flat fee because of the complexity of the case, you may be able to arrange a partial flat fee where the attorney will provide certain services for a set amount and then bill you on an hourly basis for the remaining, more complex services. Similarly, if you are more comfortable with a contingent fee but the attorney does not wish to take a chance of not getting paid on your case, you may be able to work out a partial contingency so that you pay half of the fees and the expenses on an ongoing basis and pay the remainder of the fees only if your case is concluded successfully.

    Once you and the attorney have agreed on a fee arrangement, be sure to get it in writing. Attorneys should give you a retainer agreement that spells out the scope of the legal services the attorney is to perform, the fee arrangement, any down payment or retainer that you need to pay the attorney before the attorney will begin work, when you will be billed and when you will pay, and other matters upon which you and the attorney have agreed. For hourly fee arrangements, attorneys usually send clients detailed bills every month showing the work they performed and the expenses they incurred. If you have another type of fee arrangement but still wish to see a periodic description of the work being performed for you, you can ask the attorney to send you periodic statements of services and expenses.

    A clear agreement with your attorney about legal fees will get your relationship off to a good start and keep it good.  Take a little time now to work things out and you can avoid spending a lot of time to straighten things out later.

Copyright 1999 by Cynthia Thomas Calvert. All rights reserved.