More options than just an hourly rate

Understanding Legal Fees

How do lawyers set their fees?

Many lawyers charge an hourly rate for their services, but there are other types of fees, including “fixed” or “flat fees” for a particular service, and contingent fees. Lawyers are required by ethical rule to charge a reasonable fee. Some attorneys provide limited representation fees to assist clients who are managing their own legal service. The fee can vary depending upon the circumstances of the case and the experience of the lawyer. A lawyer must consider a number of elements in computing a fee:

The most important is the amount of time the lawyer spends doing work for you. Most lawyers who charge by the hour have a minimum billing time of 1/10 to 1/25 of an hour. You will be charged for all the time the lawyer actually spends working on your case, including research, writing, and phone calls made to discuss you legal matter. Many lawyers may charge a separate hourly rate for work performed by the their staff.

Ability, experience and reputation are natural considerations in setting a fee. You should expect to pay a higher hourly rate for a lawyer whose expertise in a specific area of the law is in demand.

Flat fee services are common for legal work that is based on a well known process. Common areas for flat fee services are bankruptcy, uncontested divorce, and expungment of a record.

The results achieved, in some circumstances, may be an element in deciding your fee. The “contingent fee” arrangement is an example. This is an arrangement often used in personal injury or collection cases where the lawyer receives no fee unless he or she recovers money for the client. If money is recovered, then the lawyer receives a percentage of the recovery agreed upon at the time the lawyer begins representing the client. The percentage is based on a number of factors including the type of case and the stage at which the case is resolved. The client must, however, be responsible for court costs, such as filing fees and depositions, and must reimburse the lawyer for any out of pocket expenses incurred by the lawyer, such as for expert witnesses or document production. Contingent fee arrangements are not permitted in domestic relations cases and criminal matters. Contingent fee arrangements must be in writing.

Limited representation or limited scope service fees are for legal work where the client is managing their legal matter on their own but may need occasional advice or guidance on a particular part of the process. These fees can take the form of hourly or flat fee billing depending on how the attorney has structured their practice and the needs of the client.

When should fees be discussed?

At the very first interview. The lawyer may not be able to forecast the exact amount of time and effort required, but he or she should be able to provide an estimate based upon past experience. Depending on the legal matter, they should also be able to provide a review of the process and possible paths a matter might take which can impact the cost of the matter. The lawyer should provide information on how they bill and how bills can be reviewed and paid. You should never hesitate to discuss fees at any time during the handling of your legal matter or even after you receive your bill.

Who is responsible for payment of a fee?

You are the client and must pay fee and expenses relating to your legal matter. In some cases that go to court, a judge may award a partial or full fee to be paid by the other side, but this does not release you from the obligation to pay your lawyer. Some fee judgments are not collectable and others cover only a part of the services rendered.

When are payment of fees made?

Many lawyers will require a retainer fee, or advance deposit, to apply against expenses and fees that are incurred. You should expect to pay this when you ask your lawyer to represent you. In hourly fee cases, you should ask the lawyer for a monthly billing with an itemized account of services performed and expenses paid. Any questions you have about the billing should be made as you receive the monthly statements. Flat fee services may be paid in a split format such as 1/2 at the beginning of a process and 1/2 at the end. A contingent fee case is billed upon completion of the case, except for expenses that must be paid as they are incurred.

Are their ways to reduce the costs of a case?

When beginning a legal process it is best to collect as much information as possible prior to meeting with your lawyer. Write down any names, addresses and telephone numbers of all persons involved and all facts you can recall that may pertain to your case. Doing this yourself will cut down on the time the lawyer will have to spend gathering the information.

  • Take any papers relating to the case to the first interview;
  • If the lawyer requires additional information, retrieve it as quickly as possible;
  • Be as brief as possible in all interviews with the lawyer;
  • Make a full and honest disclosure to the lawyer of all the facts…good or bad. The lawyer is required to keep all facts in strictest confidence; and
  • Avoid unnecessary telephone calls to the lawyer.

You should consider the financial advantages or disadvantages of a proposed legal action by discussing it with the lawyer. For example, would the court costs and legal fees be more than the amount of a bad debt you would like to recover?

What if I do not agree with a fee?

The Utah State Bar maintains a Fee Dispute Committee for the purpose of providing a procedure to resolve fee disputes between clients and their attorneys practicing in the State of Utah. This is a voluntary process for both the client and the attorney and each must agree to enter into the process to resolve a dispute.  More information about this process can be found on our website at the The Utah State Bar Fee Dispute Resolution Program page.