How Do Lawyers Bill Clients?
The answer to this question can often be complicated without individual client information. However, there are several common ways that law firms and attorneys bill clients. The three most typical billing fee agreements offered are:
Hourly BillingThe client pays an hourly fee to the law firm for the actual work that is performed. This fee is usually between $200-400 per hour. The Mitten Law Firm charges an hourly rate of $200.00 per hour under this type of fee agreement. Hourly rates are often broken down into 1/6-hour intervals.
For cases that are charged on an hourly basis the law firm will usually require a certain amount to be paid at the onset of representation. This *lump* payment is called a retainer, which works like a down payment for services. The attorney will draw money from the retainer until it has been exhausted, and if- or when that happens additional funds are often requested from the client.
Flat Rate AgreementsUnder a flat rate fee agreement the client and attorney agree on a set price for the legal work that is performed. This agreement will be made prior to the onset of representation. For example, we charge a flat rate fee of $999.00 for individual Chapter 7 bankruptcies, our flat rate bankruptcy fee includes the $335.00 federal filing fee.
It is important to ask your attorney if filing fees, which can often be several hundred dollars, are included in the flat rate fee that is agreed upon. More often than not, filing fees, process serving fees, and other extra fees are not included in flat rate quotes.
Contingent Fee AgreementA contingent fee agreement is most commonly used for civil suits, this is when one party is suing another party for some kind of monetary damages. Under this style of fee agreement, the client will usually pay nothing to the law firm unless they win their case.
If a positive outcome is had, the law firm would take a percentage of the winnings as their fee. The percentage that is earned by the attorney will always be determined prior to the onset of the case and can vary, it is usually 1/3rd the amount that is won.