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 Attorneys Fees
Content from Good Judgment.
Distributed by William E. Gast, PC, LLO
© 1992 Primerus
If your
eyes glaze over when you hear terms like "retainers" and
"contingent fees", you're not alone. Here are what those and other
financial phrases mean at most law firms.
Retainers, hourly rates and fixed fees
The word "retainer" can mean two things. One is a regular sum of
money (e.g. $1000 a month) paid to an attorney to keep him or her
available for any necessary legal service. Some businesses pay
their attorneys this way. "Retainer" is also used as a term for a
deposit, held in trust, to be applied later against the hours
charged for legal work. "Fixed Fees" are popular ways to pay for
routine legal work, such as simple wills, bankruptcy filings, or
some divorces. If you hire a lawyer on a fixed fee basis, be sure
you know exactly what items the fee includes. "Hourly rates" are
self-explanatory. But realize that different people within a firm
may be working on your case at different rates - often to your
advantage. Also, you should know that more experienced lawyers
tend to charge more, and that large firms often bill more than
smaller ones. Be aware, also, that hourly rates are usually in
addition to the law firm's expenses, such as mileage, court filing
fees, deposition court reporters' fees, expert witness fees, etc.
When they say "pay only if you win"
There's a
popular misconception that good attorneys bill only by the hour,
and that they bill a lot. However, if you have to sue someone,
some of the best attorneys (including "AV" rated ones) will accept
your case for a contingency fee. That means they'll be paid fees
only if you win. Their compensation will be a percentage of your
reward. Be sure to ask (1) what the lawyer's percentage will be,
and (2) if you're still liable for expenses if you lose, and, if
so, precisely which expenses.
"But I've heard bad things about contingency fees"
Contingency fees have been criticized a lot lately. Some people
blame them for crowded courts and high insurance costs. (Actually,
the causes of those problems are far too complex to cover here.
You should know, though, that good lawyers don't take frivolous
cases to court. And high insurance costs have more to do with the
insurance industry than they do with our justice system.) But
contingency fees are important in keeping the legal system open to
everyone. Without them, only the rich could afford good lawyers.
(If you were hurt so badly you couldn't work, could you afford a
$200-an-hour attorney?)
From Good Judgment
Distributed by William E. Gast, PC, LLO
© 1992
Primerus
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