Traditionally, the most common
fee charged by a lawyer was the hourly fee, which is an agreed amount
for each hour of time a lawyer works on your matter. There
are many inherent risks, however, with the hourly fee. It
is difficult to choose lawyers based upon hourly fees without knowing
how many hours the matter will take the lawyer. For
example, an expensive, but experienced, lawyer may charge you less
overall than a cheap, but inexperienced, lawyer. During
your initial consultation with several lawyers, have them give you a
best estimate of the total legal fees it will take. This
will not be legally binding on the lawyer like a fixed fee, although
it may have some moral force, and it will give you a better basis to
compare costs among lawyers, other than just rates.
Hourly fees do not usually
take into account the differing type of work involved, such as
courtroom versus library work. Ensure
that the right individuals, such as paralegals, do the right work,
such as routine paperwork, and that a different hourly rate be used
for each. You might even
try getting a different hourly rate from the same individual for
differing work, using the above example of courtroom versus library
work. Using the above
rationale try to get a lower blended rate for all work as an
alternative to differing rates.
Hourly fees
may only be part of the legal costs you pay.
Many law firms charge for normal overhead items separately,
such as photocopying, long distance telephone calls, and sometimes
even secretary charges. You
may even end up paying for the accounting and billing efforts for
these costs. When you
negotiate an hourly fee with an attorney, attempt to get an hourly fee
that includes all overhead charges. This
is actually easier for both of you, and more lawyers agree to this
now.
Fixed fees,
if you can get them, are preferable to hourly fees in many
particulars. Most importantly,
you know the total cost of your legal matter in advance. Now,
you can shop this cost around to several lawyers to get the lowest
cost. Be sure in this regard
that there are no significant legal work exclusions from the fee, or
if there are, that they are consistent among lawyers for comparison
purposes. You can see my present
fixed fee schedule here.
There is a distinct financial
incentive for lawyers to spend more hours on an hourly fee matter than
a fixed fee matter. This
lawyer has worked in law firms and knows the pressure to bill in order
to become partner, or even to stay with a firm as an associate.
The cost of the legal matter invariably exceeds the
expectations of the client. Attempt
to get a fixed fee, if at all possible.
Beware,
however, of a fixed fee that is substantially lower than other fixed
fees quoted. This could be an
error in estimation of the time, talent and effort involved in a legal
matter. This lawyer may
not adequately support your matter with the attendant negative result. If
you hire such lawyer, be sure he or she adequately explains beforehand
why the fee is so much lower than others.
Caveat:
The purpose of this article is to provide information, rather than
advice or opinion. It is accurate to the best of my knowledge as of
the date of the article. I have no duty to update this article. The
information, examples and suggestions presented in this article have
been developed from sources believed to be reliable. This article
should not be viewed as a substitute for the guidance and
recommendations of a retained professional and should not be construed
as legal or other professional advice. In addition, I do not endorse
any actions addressed herein, unless they are produced or created by
me. I recommend consultation with me or other competent legal
counsel and/or other professional advisors before applying this
material to any particular factual situations.
