ATTORNEY FEES-A BRIEF EXPLANATION 
Friday, December 5, 2008, 10:08 PM
Posted by Administrator
There are generally three ways for lawyers to calculate fees:

1) Hourly. This recognizes that for many kinds of cases, litigation particularly, it is impossible to figure out in advance how much work will go into resolving the case. Will it go to trial? Will it settle at court ordered mediation? Or before? Is the other party and/or the lawyer reasonable and eager to resolve things or crazy-nut-interested mainly in making the other side's life a living hell. How much does the other side have to spend on fees? How interested in the other lawyer in resolving things vs. running up a big fee to make his or her next yacht payment?

2) Contingency. The lawyer gets a piece of the action if there is a recovery. If there isn't a recovery, the lawyer doesn't get any fee at all and probably doesn't get paid back for his or her out of pocket costs. Lawyers like contingency fee cases if:
a) The other side is clearly liable for damages to his/her client.
b) There is money to pay for the damages...insurance or a deep pocket on the other side.
Clients like contingency cases if:
a) The client doesn't have money to pay an hourly fee, or,
b) The client wants the lawyer to take the risk of losing the case.

Very few cases except for injury cases and big money collection cases are handled on a contingency basis. Almost all injury cases are handed on a contingency basis ("no recovery, no fee").

In Florida, there is a standard contract the Florida Bar requires that clients sign and a Statement Of Client's Rights that the Bar also requires. This says, among other things, that you have a few days to fire your lawyer without having to pay the lawyer anything (you have a right to fire your lawyer any time you want but they will probably be entitled to a fee for work they've done) and that you have right to negotiate the percentage of the recovery the lawyer will get as a fee (yes, you can try to negotiate the percentage of the lawyer's fee).

For lawyers, the perfect case is, for example, an auto accident cases with damages worth, say, $150,000 and policy limits (the most an insurance company is obligated to pay) of, say, $100,000. The insurance company will pay the $100,000 quickly and without trouble in exchange for a Release from the injured client to the insured. The lawyer will explain to the client that the smart thing to do is take the $100,000. The lawyer will get a fee of between $33,000 and $40,000 (depending primarily on whether a lawsuit was filed) for minimal work. On the other hand, if the lawyer isn't advertising on TV, the lawyer isn't getting these csaes.

Note that contingency fees are illegal in criminal cases and divorce cases...something about lawyers being tempted to cheat in these kinds of cases if their compensation is tied to the result (e.g. the lawyer only gets paid for a "not guilty" verdict).

3) Flat Fee. If the lawyer can make a reasonable guess on how many hours it is going to take to do the work, the lawyer may take the case for a flat fee. The fee won't change with the amount of work the lawyer does. Flat fees are common for Wills, Trusts, criminal cases, simple divorces (no property, no kids, short term marriage), name changes, and bankruptcies. But, you may be able to negotiate a flat fee for other types of cases. For example, if you are looking for a lawyer for a divorce case, your lawyer might know the other lawyer and might have had similar cases with the other lawyer. This makes it (somewhat) easier to figure with some certainty how much time your divorce will take. Multiply the time by the hourly rate...add in a fudge factor and there is the fee. Flat fees insulate you from the possibility of a huge bill if your case gets complicated. Flat fees are the rule in criminal cases where you are paying your lawyer as much for what he or she knows and who he or she knows as you are for the time the lawyer puts in. A lot of what lawyers do in criminal cases is spend their goodwill and goodwill does not come cheap.

IV) THE OTHER SIDE PAYS Okay, there are at least four ways that lawyers charge fees. There are some kinds of cases where the other side pays the fee most of the time.

Generally, in Florida, you pay your own fees, win or lose, BUT: If the other side makes a frivolous claim against you, they may end up having to pay your fees. If you are involved in a divorce case, your spouse may have to pay most or all of your fees if he or she has a much better ability to pay fees than you do. There are ways to make an offer in the course of a civil lawsuit that will result in getting a judgment for fees against the other side if, after a trial, they don't come close enough to matching your offer. Contracts usually provide for the defaulting party to pay the other side's fees. Credit card agreement provide that you have to pay the company's attorney's fees if you don't pay your bill. Same thing for mortgages and car loans.

AND, there are some laws that are designed to encourage lawyers to file lawsuits by providing that the lawyers will get fees from the company they sue if the lawsuit succeeds. Lawyers can get their fees for suing for unpaid wages and, a big thing now, for suing companies that fail to pay workers time and a half for overtime. If your company has failed to pay you overtime, this could be worth pursuing. My friend Mark Cullen just got paid a truckload of money for attorney's fees for representing dozens of workers in an overtime case. I'm sure he would be willing to consider taking on similar cases.

SINCE THIS IS THE INTERNET, YOU SHOULDN'T BELIEVE ANYTHING YOU READ IN THIS BLOG. GO SEE A LAWYER.
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