Flat Fees
Flat fee arrangements are for
relatively simple legal matters. For
complicated matters involving professional employment matters or complex civil
rights issues a flat fee is rarely used.
Recognize that a flat fee arrangement may not include appeals or other
legal related matters not covered by the flat fee contract.
Retainer
For complex cases most attorneys will demand a retainer
fee. The retainer fee is a form of
pre-payment which is usually based on the lawyer's hourly rate. This is an advance payment to the attorney who
will be providing certain legal services
on behalf of the client. This retainer fee is done to ensure legal services as
is a sort of down payment. The retainer fee
is usually non-refundable, is placed into the lawyer's or law firm's business
or trust account where they have access to it to pay any upcoming expenses
associated with the services that are rendered on behalf of the client. If the
fees go above the retainer amount, the client must pay that amount. So the
retainer fee is just to get the ball rolling and not a complete payment for
legal services rendered. The retainer fee is just an initial estimate and it
prohibits the lawyer or his firm from representing a competitor of the client.
Additional fees beyond the retainer are often required when a matter must go to
court. A legal retainer is also used by
those who have need for a lawyer on a regular basis and in some cases is paid
on a monthly basis thus ensuring access to an attorney when legal guidance or
assistance is needed. Before accepting to pay a retainer fee, get the fee,
terms and conditions in writing.
Contingency
A contingency fee is a fee
that is not earned or paid until and unless a certain event occurs - in
injury cases this means there has to be a monetary recovery for the injured
person's damages.
A contingent fee arrangement
provides that the lawyer does not get paid unless the client recovers money, in
which case the lawyer gets a portion of it. Contingent fees are common in cases
where an injured client is unable to pay a lawyer but a relatively large
recovery is anticipated. Courts may not allow attorneys to provide
services based on contingency when such an arrangement might bias the attorney
to not provide services that would be in their clients best interests.The legislatures and courts in most
states have become very involved in regulating and overseeing contingency fee
relationships between attorneys and clients. In New York, for example, court
rules provide that in personal injury and wrongful death negligence claims,
any fee charged or paid to the injured party's lawyer in excess of certain
schedules is unreasonable and unconscionable (subjecting the lawyer to
disciplinary proceedings that can result in disbarment and the forfeiture
of the excess fee, if not the entire fee).
A contingency fee agreement is a
payment arrangement that allows a plaintiff who has been injured and is seeking
legal remedy to obtain legal representation even if they do not have money to
pay a lawyer at the beginning of the case. A client does not have to pay a
contingency fee up front, agreeing instead to pay an attorney a percentage of
the client's award should they win the case. The contingency fee agreement will
dictate the circumstances of payment, and how much an attorney is owed. The
rules governing lawyers in your state will frequently determine when
contingency fees are appropriate.
Contingency
Fee Basics
The basic concept of the contingency
fee agreement is that the client is out little or no upfront expenses; you as a
client do not pay legal fees unless and until you win, and then the
lawyer receives a percentage of your recovery as his or her fee. If you lose
your case, there is no legal fee at all for the lawyer. Contingency fee
agreements are customarily used for cases wherein a plaintiff is seeking money
damages for some sort of injury. Depending on the nature of the case and
the damages claimed, lawyers will not always accept a contingency fee
arrangement.
Most states permit contingent fee
agreements; however, some state bar organizations have become critical of
contingency fee agreements as excessive fees and have worked to place limits on
their use. Advocates of contingency fee
agreements argue that they provide a motivation for the attorney to obtain the
best possible settlement for their client and provide a way for those who could
not ordinarily afford to do so, to access the justice system. Visit the
state bar website in your state or consult an experienced local attorney
to find out if limitations have been placed on the use of contingency
fees in your state.
Operating
Under a Contingency Fee Agreement
After a contingency fee agreement is
reached, the attorney will pay the expenses of the lawsuit. Expenses can
include paying filing fees, arranging for payment of depositions, and paying
for copies of medical records or reports. If your attorney is successful in
obtaining a judgment or settlement on your behalf, the written contingency
contract will control how your funds are dispersed. Some contingency fee
agreements will operate under a graduated percentage contract. For
example, if a litigation lawyer has to file a lawsuit and go to trial, his or
her agreement may provide for a higher percentage because more effort is
required for litigation. If the attorney does not have to file a lawsuit, but
instead resolves your lawsuit through mediation or another form of alternative
dispute resolution, the contingency agreement may provide for a smaller
percentage. Some contingency fee contracts provide for expenses plus a
percentage.
These are the fees permitted in the state of New York:
- Flat Fee (most typical): 33 1/3% (one-third) of the sum recovered
- Sliding Scale: 50 % of the first $1,000 recovered, 40% on the next $2,000, 35% on the next $22,000 and 25% on any amount over $25,000
In either event, the percentage fee is calculated on the net sum recovered,
meaning that the expenses and disbursements that the lawyer advanced
for the case are deducted "off the top" and repaid back to the lawyer.
The expenses and disbursements get deducted from the settlement amount
and then the percentage is applied to the net amount.
Pro-Bono
Pro bono public means "for the public good". The
term is generally used to describe professional work undertaken voluntarily and
without payment as a public service. Pro
bono legal counsel may assist an individual or group on a legal case by filing
government applications or petitions. Pro
bono counsel is sometimes paid for by private non-profit organizations who
specialize in taking civil rights, constitutional law or human rights law
cases. In these situations the
organization is often very selective about what cases they take. Do realize that attorneys must be paid for complex cases. Volunteer pro bono attorneys only handle simple legal advice and usually when complex litigation is involved there must be an organization or agency that pays the attorney fees - even though services might be a low cost or no cost to you.