Advantages and Disadvantages of Hourly Fees and Fixed Fees
The Hourly FeeTraditionally, the most common fee charged by a lawyer was the hourly fee, which is an agreed amount for each hour of time a lawyer works on your matter.A There are many inherent risks, however, with the hourly fee.A It is difficult to choose lawyers based upon hourly fees without knowing how many hours the matter will take the lawyer.A For example, an expensive, but experienced, lawyer may charge you less overall than a cheap, but inexperienced, lawyer.A During your initial consultation with several lawyers, have them give you a best estimate of the total legal fees it will take.A This will not be legally binding on the lawyer like a fixed fee, although it may have some moral force, and it will give you a better basis to compare costs among lawyers, other than just rates.
The Fixed FeeFixed fees, if you can get them, are preferable to hourly fees in many particulars. Most importantly, you know the total cost of your legal matter in advance.A Now, you can shop this cost around to several lawyers to get the lowest cost. Be sure in this regard that there are no significant legal work exclusions from the fee, or if there are, that they are consistent among lawyers for comparison purposes.
There is a distinct financial incentive for lawyers to spend more hours on an hourly fee matter than a fixed fee matter.A This lawyer has worked in law firms and knows the pressure to bill in order to become partner, or even to stay with a firm as an associate. The cost of the legal matter invariably exceeds the expectations of the client.A Attempt to get a fixed fee, if at all possible.
Beware, however, of a fixed fee that is substantially lower than other fixed fees quoted. This could be an error in estimation of the time, talent and effort involved in a legal matter.A