Are you wanting to hire a lawyer but you are concerned about the hourly rate or lawyer fees? Are you not sure how lawyers bill? We put together this article to explain the lawyer’s fee difference which depends on the area of law practiced.
There are three main terms that you should know about the lawyer’s billing practices before hiring a lawyer:
How Do Lawyers Bill?
When talking about legal fees, a retainer refers to an initial deposit paid by the client to the lawyer in advance of work being completed to secure the lawyer’s services. The retainer is held in the lawyer’s trust account and is not touched until work has been completed on your matter.
Once work has been done and an account has been created, the lawyer will use the funds from the trust to pay for any fees and disbursements charged to the client rather than require the client to come in and make a payment. Most lawyers will request an initial retainer prior to working on a matter.
Retainers are often around $2000-5000. It depends on if you are likely to go to court or not. Further, you can ask the lawyer at the initial consultation on how much the retainer will be. Retainer amounts are not really that important for most clients.
If you don’t use the retainer, you get the remainder back. For some reason, movies make a big deal out of the retainer. People say things like “I’ve got a lawyer on retainer.”
These sorts of things are silly. Think of a retainer as a deposit. When you rent a car or stay at a hotel, you make a deposit. There is nothing special about retainers.
Class Action Lawsuits
Class actions normally don’t require any retainer. You simply sign an agreement, and you are not responsible for any legal fees or charge from the law firm. If you win, you get a percentage of the settlement or judgment.
The law firm covers the legal costs of fighting the lawsuit. Therefore, many people enjoy signing up for class-action lawsuits. It’s pretty much all potential gain, with very low risk. During COVID-19 the top business lawyers got a lot of requests for class action lawsuits.
Fees are fairly self-explanatory. They are the amount that the lawyer charges for the work they have completed. Before you hire a lawyer, make sure you understand how legal fees work.
Also, make sure the lawyer uses practice management software. Examples might include Esi Law or Clio. If the lawyer keeps track of the hours on a piece of paper, stay away.
You should be able to get a detailed account at the end of the month. This account should show you the total amount of lawyer fees. Also, it should have details about the work done.
You will also want to receive an explanation of the value you received. It’s great if the lawyer offers favourable fee arrangements. However, if the lawyer does hours of work and you don’t see the value, that’s not helpful.
Billable hours with no results are a clear sign to get a new lawyer.
Contingency Fee Agreement
A disbursement is a fee that a lawyer incurs in relation to a matter on behalf of the client for which the lawyer is entitled to be reimbursed for by the client. Typical disbursements include postage, photocopying charges, long-distance calls, and process server fees.
Looking for a divorce lawyer? Contact one of the lawyers at and ask about their flat fee billing option. Have questions about the lawyer’s billing methods? Talk to us!
For the most part, lawyers charge for their time based on an hourly rate. So, they take the amount of time it takes for them to complete a task on your matter and then multiply it by the hourly rate.
Items completed on a matter include everything from meetings, telephone conversations, and emails (both sent and received), to document preparation and court appearances.
Some lawyers will charge fixed amounts or flat fees for certain tasks instead of using their hourly rate. Also, flat fee billing is typically used when the matter is uncomplicated and straightforward.
Lawyers charge different amounts for disbursements. So do your research! For a larger case, disbursements can make a big difference in how much the lawyer bills you.
Fee Arrangements | Lawyer Fees
Alternatively, some lawyers may opt to provide their work on contingency. What this means is that the lawyer agrees to do the work for a percentage of any money awarded to their client for their matter.
In the event of a contingency fee agreement, if the client is unsuccessful, the lawyer doesn’t get paid. Whether a lawyer is able to take on a matter by contingency depends on the type of legal matter.
Different lawyers will have different fee arrangements based on their firm policies. Make sure to speak to your lawyer about their fee options for your initial consultation.
The fee arrangements will be different depending on the area of law practiced. Family law lawyers will often use the hourly rate or a fixed fee.
Cases involving personal injury will often be a percentage split with the lawyer.
Understand Lawyer Fees | How Lawyers Bill
Lawyers with many years of experience will often have a higher hourly rate than junior lawyers. The lawyer’s hourly rate might vary between $200-1000/hour! So you need to know what you are looking for. Are you looking for an affordable lawyer or the best lawyer?
I decided to write this short blog after seeing the below meme. There is always someone cheaper! There are many other common sayings that touch on the subway.
“You get what you pay for.”
“Nothing get’s you nothing.”
Obviously, the meme is meant to be funny. But it also reminds me of times I tried to do things “the cheap way” in the past. It also reminds me of China, where everyone knows a “friend” that can do things for 10% of the price of a professional company.
It always starts with some friend, it doesn’t work out, then the professional company is hired to do the work.
There Is Always Someone Cheaper
Once someone’s “friend” was hired to clean the pool that had turned green (algae.) The friend had no idea what they were doing and simply poured four massive tubs of bleach into the pool.
The pool had so many chemicals in it, it took a month until the water returned to normal PH levels. A professional company was eventually hired, fixed the filter, and cleaned the pool.
Value has always been associated with cost.
Low value—> Low cost
People know that lawyers are expensive, so sometimes they try and do things the “cheap way.” They use online templates that are not specific to their needs, they get advice from Google instead of a local lawyer, or self-represent even when the legal issue is very serious.
If you have a family or criminal law matter self-representing is extremely risky.
What happens if a judge rules that your spouse gets the assets? How much will that cost you?
What happens if you lose custody of your child? How much is seeing your child worth?
Don’t Make Rookie Mistakes
Pay a lawyer $250-350/hour and save yourself time, stress, and possibly money in the long term. If you lose your case and then hire a law firm to do an appeal it is extremely expensive. Appeals often cost around $35,000. Can you afford that?
Book a free 30-minute consultation with a lawyer and go over the lawyer agreement. The lawyer’s hourly rates are on the lower end.
If you have a monthly budget for legal fees, let the lawyer know. There is always someone cheaper, but how about you do it right the first time instead?
Author: Alistair Vigier is the CEO of ClearWay Law