Most people are aware that an attorney’s fee can be awfully pricey. Top attorneys can make thousands of dollars per hour. However, where do these seemingly arbitrary prices come from? Well, there are a variety of different ways for attorneys to be paid in most civil cases. Typically, they are paid under one or a combination of the following arrangements:
- Hourly rate
- Flat fee
- Contingency fee
Let’s take a closer look into each of the above options.
An hourly rate is the most common arrangement, where the client agrees to pay the attorney an hourly wage for however much time he or she spends on the case. Usually, this wage depends on location and experience. In rural areas, it may be from $100 to $200 an hour, whereas in bigger cities it can be $200 to $400, with some charging significantly more.
A flat fee is relatively self-explanatory, and often used in simpler, more clear-cut cases. Examples of such cases are wills, uncontested divorces, and simple bankruptcy filings. In these cases, the attorney is likely to charge a one-time, often upfront fee for the entire case. It is important to be clear about what is included in this fee and what is not.
A retainer is often used in conjunction to the attorney’s hourly rate. More specifically, it serves as an advance payment that the attorney uses to cover any costs that arise during the case. Periodic billing statements will show what expenses were deducted from the retainer and why. The retainer price can vary depending on the attorney’s experience and location.
Lastly, a contingency fee is another form of billing used in some specific types of cases. This means that the attorney does not take any up-front fees from the client. Thus, this is a rather enticing option for many clients. However, the contingency comes into play after the case has been settled. The attorney gets a percentage, most often 33%, of the settlement or money obtained for the client. This type of fee is often used in automobile accident lawsuits, medical malpractice claims, other personal injury cases, and debt collection cases.
Although an attorney’s fees can be pricey, they are often well worth it. The time and money saved in the long run is often great. Now that you are armed with specific knowledge on pricing structures, you can be sure to secure the attorney that is right for you in the future.