If you need to hire an attorney for any reason, including representing you or your business, one of your first questions is probably how they’ll get paid and what it will cost you.

What Are the Most Common Attorney Fee Arrangements?

There are several different attorney fee arrangements, and the one that an attorney will use tends to depend primarily on the type of law they practice and your case.

The following are some of the common ways you might pay an attorney.

Contingency Fees

A contingency fee is usually how personal injury attorneys and attorneys who handle medical malpractice claims will get paid.

With a contingency fee, when you hire an attorney, their payment is a percentage of the amount you’re awarded. That award can be a settlement or a judgment. If you lose the case, the lawyer doesn’t get paid.

There is a note here—even if you lose, you’ll probably have to pay expenses, so you need to read everything before signing anything.

A contingency fee is usually one-third of the awarded amount, which would be 33 1/3%. Some lawyers will adjust this rate. For example, if your case settles before trial, you might pay a lower rate. If you file an appeal, then the rate might be higher.

An attorney is unlikely to agree to a contingency fee if the amount of money being discussed is small, or they think they’d have to put in far more time and money to complete the case. In business law, there’s rarely an opportunity to pay contingency fees.

The core idea behind this type of fee is that payment for your attorney’s services is contingent on you receiving compensation.

Consultation Fee

A consultation fee could be what you see if you’re looking for a lawyer to help you with one particular issue in your business, and you primarily need guidance.

A consultant fee would just be what an attorney would charge on a fixed or hourly basis. It may be their fee for just meeting with you once to get help with whatever you need.

In some situations, an initial consultation is free, such as a personal injury case, but you should always clarify before making an assumption.

Retainer

Another type of fee that you might see with business lawyers helping you on a particular thing is a retainer. A retainer is a set fee that might be based on an attorney’s hourly rate. It’s kind of like a down payment for the attorney’s services.

When you pay a retainer, it’s put in an account, and then as you use the attorney’s services, they deduct the money from the account.

Usually, you can’t get a refund for a retainer fee.

Sometimes paying a retainer is a way to have an attorney be on-call for you during a period of time.

Retainers can get confusing and complex, so go over expectations carefully before agreeing to pay an attorney this way.

Hourly Rate

We touched on the idea of an hourly rate above when discussing consultation fees.

An hourly rate is what an attorney will bill you per hour or for each portion of an hour they spend working on your case. An hourly rate is simple, but at the same time can lead to the most confusion and frustration if you get a bill for a lot more than you were expecting.

Some lawyers have different hourly rates depending on the type of work they’re doing.

Also, if you go to a big firm, the more senior lawyers there will usually charge a higher hourly rate.

If you pay a retainer and then your lawyer does more work than that amount, it might become an hourly fee arrangement.

Flat Fees

A straightforward way to do things is a flat fee. Attorneys might charge a flat fee if they specialize in one particular area and they can get a pretty good estimate of how much work they’ll have to put into your case.

For example, if you’re getting a divorce, it’s not contested, and you don’t have any significant assets, your attorney might work for a flat fee that you agree upon ahead of time.

Finally, there’s something called a statutory fee.

A statutory fee is something that a court or statute may set, and you’ll usually see this arrangement in bankruptcy or probate proceedings.

Conclusion

A big note here is that you should always ask about any additional expenses that you may incur throughout your case, in addition to your attorney’s fees.

__________________________________________________

Some other articles you might find of interest:

Marketing blogs you must follow as an entrepreneur:

29 Marketing Blogs Every Small Business Must Follow

Are you feeling cramped in your home office space? You might enjoy this article:

Home Office Design Ideas for Small Spaces