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Understanding Legal Fees

Posted by attorney George Davis

Understanding Legal Fees; a breakdown of a standard personal injury agreement

In our experience one of the biggest reasons that injured people don’t seek the help of an attorney is because they don’t think that they can afford the service, or because they think that they have been treated unfairly by attorneys in the past. It is our hope to relieve these concerns through breaking down our own fee agreement, which is fairly standard across the industry.

Generally speaking, the standard attorney fee agreements break down into 6 major categories:

Identification of parties

This portion of the agreement simply states who is bound by the agreement and is usually subject to the inclusion of additional attorneys should the case require them.

Keep in mind: Generally you will need separate agreements for separate individuals, even in the instance of children. This ensures clarity of terms and allows for modification of the agreement based on your individual needs.

Legal services to be provided, and those which are excluded

Law is a very, very, broad field with many specialties involved ranging from workers-compensation law to filings with appellate courts. Many attorneys -including those who work in personal injury firms- specialize for your benefit and accrue knowledge and expertise in various sub-fields of law. Because of this your attorney may not be able to handle certain claims, even some arising directly from you case. Make sure you understand the scope of the services you are seeking, and don’t be afraid to consult with another attorney if necessary.

Responsibilities of Attorney and Client

When you seek representation in a lawsuit you are essentially granting an attorney the right to appear on your behalf in court or to act as your agent in the resolution of your case. This places a substantial burden on a lawyer who obviously cannot read your mind and know what you do. Thus, many fee agreements will include a section outlining what the attorney will do for you, such as maintaining a file, gathering your medical records, and answering your questions. Likewise, fee agreements often require potential clients to agree to be completely truthful and cooperative with their attorneys. This is your case, and it is important that you remain involved and prepared to see it through to victory.

Attorney’s Fees and costs

Different types of cases demand different sorts of attorney’s fees. The standard personal injury lawsuit works off of a contingency agreement A contingency fee agreement allows the client to receive legal services without having to pay up front. Legal fees in New Mexico range from $175 per hour to $350 per hour. Most people (even lawyers) cannot afford to pay this amount of money up front. In a typical lawsuit legal fees can run as high as 6 figures. A contingency fee gives normal people assess to the court house. Most people would be excluded from obtaining justice if there contingency fee agreements.

With a contingency fee agreement, the attorney takes a percentage of the total jury award or settlement amount. These percentages range from 1/3 pre-suit to a full 50% if the case must be appealed. Often the attorney will advance the litigation costs on behalf of the client. Litigation costs can range from a few thousand dollars to a few hundreds of thousands of dollars.

Keep in Mind: Most lawsuits will generally seek attorney’s fees as part of the total damages sought. So, if there is a court-mandated fee-award, then typically contingency fee will be alter to be the greater of the contingency fee or the attorneys’ fees.

Taxes and Liens

What you need to know here is that most attorneys do not handle tax matters relating to settlements, which means you will likely need to think ahead if you received any award that could be taxed in the future. Likewise, injured persons are often unable to work and pay off medical expenses, thereby incurring substantial debts. While most attorneys are willing to negotiate with medical providers to lower your costs you must remember that, ultimately, any debts associated with your suit are your responsibilities and must be handled accordingly.

Termination of Representation

This portion of the contract applies to both you and your attorney. Generally, you will be allowed to “fire" your attorney at any point in the proceedings and they reserve the right to drop you as a client should you lie, become uncooperative, etc. However, it is important to keep in mind that, even though you can fire your attorney at will, you will be held responsible for any costs and fees associated with your case up until that point.

We hope that this simple breakdown helps quiet any concerns you may have about hiring an attorney, or at least help you ask the right questions during an initial consultation. Remember that the agreement you are signing is a binding contract, so you should never be afraid to ask questions, or seek additional time to discuss the agreement with a family member, before signing.

Please feel free to visit us for more information or if you are in the market for a New Mexico personal attorney.

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