Attorney’s Fees

When you hire an attorney, the attorney is providing you the attorney’s expertise and advice, and you should expect to be charged for the time the attorney expends on your behalf because this is how he or she gives you the benefit of their counsel and experience.  Abraham Lincoln said, “A lawyer’s time and advice are his stock in trade.”

You should never be afraid to discuss attorney’s fees with your attorney at the first meeting. Having a clear understanding between you and the attorney about the fees will assure a good working relationship between you and your attorney.  You need to clearly understand the way the attorney intends to bill you for handling your legal work.  You should expect to sign a fee agreement with the attorney regarding fees so that both you and the attorney have a clear understanding of what to expect.  While a fee agreement may not be required, it is the best way to make sure both you and the attorney have the same thing in mind.

Please feel free to discuss specific fees or fee structure with the attorney at any time.

When should you get a lawyer?

You should have a lawyer when:

• you are buying or selling real estate;
• you are buying or selling other property;
• you are thinking about signing contracts with financial consequences;
• you want a will or trust;
• someone has died and assets need to be transferred;
• you are going into business;
• you have been in an accident;
• you need a pre-nuptial agreement;
• you are involved in a family matter, such as divorce, separation, or paternity matters.

It is usually cheaper in the long run to seek a lawyer’s advice BEFORE committing yourself and running into problems.  For example, it usually costs less to have a lawyer prepare a legal document than to sign it and seek legal advice when problems are encountered.  A lawyer can often point out potential problem areas in a contract and suggest changes for your protection before you have signed.  Afterwards, you may be facing the cost of a lawsuit, which is almost always more expensive then the earlier legal assistance would have been.

Do you HAVE to get a lawyer?

Anyone is allowed to represent him or herself.  Lawyers go to school for many years, must be admitted to practice in the particular state and, in Oregon, must carry malpractice insurance.  In Oregon, no one other than a lawyer is allowed to give legal advice – this includes telling you how to fill out legal forms.  There are no legal requirements in Oregon to be a paralegal – using a paralegal may be no better than asking your plumber for legal advice.

Who pays the fee?

Generally, the client pays the fees and costs.  In court cases, a judge can only award attorney’s fees if a statute or contract provides for an award of attorney’s fees.  Even if a judge awards attorney’s fees from the other side, this does not release you from your obligation to the lawyer.  Some fee judgments cover only a portion of the total fees incurred and some fee judgments are not collectible.

In probate cases, the personal representative’s (executor’s) attorney’s fees are usually paid from the estate.

How can you keep your legal fees down?

Make sure to tell the lawyer the whole story – include ALL of the facts, good and bad.  If you leave out the bad facts, the lawyer will almost always learn them anyway, most often after having spent hours working on your matter without those facts in mind.

Gather as much information as you can.  Write down the names and addresses of everyone involved and all the facts you can recall that relate to your case.  When you do this work, it should cut down on the time the lawyer has to spend gathering this information.

Provide the lawyer with copies of any papers you have relating to your case.  Keep records of what papers you have given to the lawyer, so you don’t give the lawyer the same papers again.

Be as brief and prepared as possible when talking to your lawyer.

Avoid making unnecessary telephone calls and visits to your lawyer.  Make a list of your questions and topics you want to cover, before you call your lawyer.

What is the basis for legal fees?

Unlike a doctor or a dentist, most of a lawyer’s services are performed when the client is not present.  Clients may not realize that the advice given them or the document prepared for them is the result of many years of study and experience.

A lawyer considers a number of factors in setting a fee.  Only about 65% of the lawyer’s work day can be billed to clients, the remaining hours are spent in continuing education courses, keeping up with changes in the law, running an office and in unpaid civic and professional activities.  Operating expenses and overhead affect the cost of services.  The cost of operating a law office, including rent, equipment, supplies, law library, and insurance averages more than 50% of a lawyer’s gross income.  Experience, reputation and ability are also factors in setting fees.

The major types of fees are flat fees, contingency fees and hourly billing.

What is a flat fee and how is it set?

Flat fees may be used for other common, routine matters such as wills, powers of attorney, incorporations, and basic real estate documents such as deeds.

Lawyers may use a flat fee in handling civil and criminal cases where the work involved is usually straight forward, predictable and routine, such as simple bankruptcies, name changes, step-parent adoptions, simple bankruptcies, traffic offenses. Some lawyers will handle uncontested divorces for a flat fee.  Costs such as filing fees, service fees and witness fees are usually not included in the flat fee.

Flat fees are usually paid in advance and doesn’t vary depending on the amount of time or work involved. No refund is due if the work takes less time than expected and no additional charge is made if the case is longer.  Some situations may involve additional fees and those situations should be identified in the fee agreement.

What is hourly billing?

The lawyer charges according to the time spent working on your case. Different lawyers can have different hourly rates and one lawyer may charge different rates for different types of cases.  The amount the lawyer charges per hour will be determined by a number of factors. The most important factor is usually the lawyer’s experience in the type of case you have. In most hourly cases, the lawyer will request that you pay a retainer in advance against which the lawyer will bill the lawyer’s time. A lawyer who is charging you an hourly rate, should provide you with an itemized statement of the time the lawyer spent on your case and any expenses connected to your case.

When do lawyers charge on an hourly basis?

An hourly rate is most common when it is difficult to estimate how much time the work will take.  Lawyers might charge an hourly rate for a contested custody or contract case, or to prepare a family trust document.  It is fairly common for the lawyer to require a retainer to be paid before any work starts on the case.  This amounts to a deposit or down payment and may help to make sure that the client is financially prepared to cover the costs that may be incurred.  The size of the retainer and whether any part of it is refundable will vary from case to case and lawyer to lawyer.

What is a contingent fee?

A contingent fee (or contingency fee or percentage) is one which is paid by the client only if the lawyer is successful.  It is a percentage paid out of the sum of money that is collected by the lawyer and thus is available only in civil cases which involve suing for a sum of money, such as auto accident cases, malpractice cases, workers’ compensation cases and social security claims.

Contingent fees can be the poor man’s key to the courthouse. A person devastated by injury or loss is often unable to pay a lawyer and contingent fees allow the injured person to have a lawyer on his or her side.

In contingent fee cases, the lawyer weighs whether or not the lawyer believes that you have reasonable chance of succeeding.  If the lawyer thinks that you have a reasonable chance of winning, the lawyer may take your case by investing his or her time without payment toward your attorney’s fees up front. The lawyer is counting on being paid from a percentage of any award which you receive from a settlement or from a court. In some cases such as social security and worker’s compensation, there may be a limit on the percentage or the dollar amount that an attorney is permitted to charge. You should ask the attorney if there is such a limit and what it is. In most personal injury cases, there is not a limit on what the attorney can charge. However, generally speaking, a one-third contingency fee is the usual percentage that a lawyer will be paid from your award.  Some lawyers might charge one figure (25-33%) if the case is settled without trial and another higher percentage (33-45%) if it is necessary to go to court.  If your case is lost, the lawyer is paid nothing for the lawyer’s time. However, any expenses such as filing fees, service fess, depositions charges, court reporter fees, and witness fees remain your responsibility to pay. Although the lawyer may advance some of those costs to you if you cannot afford them, you are responsible for reimbursing your lawyer for those costs whether you win or lose.  Because the lawyer collects no fee if the case is lost, you will usually need to have a case with clear liability and damages before a lawyer will agree to a contingent fee in handling a case.

What if I have other questions about attorneys and their fees?

Ask such questions at your very first meeting with a lawyer.  It is best to sign a contract called a fee agreement with the lawyer.  Be sure to read the fee agreement before signing to make sure it sets out accurately your entire agreement.  Feel free to shop around and compare various attorneys, but don’t just shop for the lowest fee.  The cheapest lawyer is not necessarily the worst or best, and the most expensive one may not be the right one for you.  Be sure to consider such factors as location, accessibility, personality, time available and experience in your problem area.  There are lots of lawyers in most communities.  It is your job to find the right lawyer for your case.

Partially based on the handout of the North Carolina Bar’s Standing Committee on Legal Assistance for Military Personnel