The Types of Lawyers Compensation Fees

There are different types of lawyer compensation fees utilized by attorneys across the United States. The type of fee charged by an attorney largely is driven by the area of the law a case addresses. The three most common types of fees used by attorneys are hourly, contingency and flat.

Before retaining an attorney for services, a consumer is best served obtaining a written agreement in regard to fees. A written agreement is helpful in reducing confusion and disputes associated with the fee charged in a particular case or legal matter.

Hourly Fee

A major way that attorneys charge for services is through the use of an hourly fee. The lawyer enters into a contract for services whereby the client agrees to pay a set fee for every hour of work.

Hourly fees charged by attorneys vary drastically. Key factors that play into what a lawyer charges for an hourly rate include geographic location, area of law and length of experience.

An attorney must keep a contemporaneous log of time spent working on behalf of a client to document hourly fee billing statements.

Hourly fees commonly are used in divorce and criminal cases. Corporate and business attorneys also bill in this manner.

Contingency Fee

Another common method used by attorneys to bill clients is what is known as a contingency fee. Personal injury lawyers use this method to bill their clients.

In a contingency fee arrangement, an attorney is paid a certain percentage of the proceeds obtained for a client through the settlement of a case or a verdict after a trial. Typical percentages used in contingency fee cases range from 33 to 40 percent.

In most cases in which a contingency fee is used, the client owes an attorney nothing in the way of a fee unless she prevails in her case. However, a client needs to closely examine a fee agreement to see if she is responsible for any expenses incurred by an attorney whether or not a case is brought to a successful conclusion.

Flat Fee

Flat fees are fairly common in traffic and driving under the influence cases. An attorney charges her client a flat fee of a set amount of money for all services associated with a case. For example, an attorney charges $1,500 for a first time DUI--whether the lawyer spends one hour or a significant amount of time working the case.

Flat fees are not encouraged by attorney licensing agencies. These agencies believe that this type of fee arrangement is prone to abuse. First, if a case quickly is dealt with, the client ends up essentially overpaying for legal services. Second, an attorney may be less likely to devote additional and yet necessary time to a case that already has consumed a significant part of his schedule.

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