Some lawyers are notorious for the high fees they charge clients. When working with a lawyer, unwary clients can experience sticker shock, or worse: they may find that they just can’t afford to pay for legal counsel even if they badly need it.
If you’re prepared, though, your experience with a lawyer doesn’t have to be painful. In fact, negotiating with your lawyer before they start work—and discussing the small details that can add up to a big bill—can lay the groundwork for a trusting, mutually beneficial relationship.
Here are 10 key considerations to mull over before you sign a contract with a lawyer.
Research First
Start by getting a basic understanding of the different ways that lawyers can charge you. The three main ways lawyers can bill are flat fees, hourly fees and contingency fees. Depending on the complexity of your case, one may make more sense than another. Be sure to discuss this up front with your lawyer, and if their billing method doesn’t meet your needs, be prepared to find a different attorney.
Consider a Flat Fee
This method usually involves paying upfront before the lawyer starts work on your case. This can be expensive initially but may save you money in the long run. Flat fees are ideal for simpler needs, such as wills, power of attorney, contracts, establishing a business, name changes and uncontested divorces.
Consider an Hourly Fee
With this method, the lawyer bills you for the hours that they work on your case. For complicated cases, your legal bill can grow very quickly, especially when rates of $100 or more per hour are quite common.
If you accept an hourly fee structure, remember that you’ll be billed for meetings and phone calls with your lawyer, so try to keep these meetings short and to the point. Keep in mind, too, that some lawyers require a retainer fee (generally $2,000 to $10,000), which means you’ll pay a sum up front to cover a set number of hours.
Consider a Contingency Fee
This means the lawyer will take a percentage of your awarded winnings, but only if they win the case for you. According to the American Bar Association, the fee is usually 33%–40%. If the case is settled outside of court, this requires less time on your lawyer’s part, so they may be willing to take a smaller percentage, but you’ll have to negotiate details like this beforehand.
Ask for Fees in Writing
A written contract is an excellent way to clarify misunderstandings and avoid disputes down the line. Some states require lawyers to put their fees in writing, but no matter where you live, every client should have a written agreement with their lawyer about what they’ll charge for, how much they’ll charge and how detailed the fees will be on the final bill.
Be sure to ask the lawyer how they’ll itemize their hourly work and how often they’ll invoice you so that you can plan ahead (and start saving as necessary). If their payment schedule doesn’t work for your finances, ask if they can be flexible. Don’t forget to review the itemized bill when it arrives and ask questions about any items you’re unsure about.
Cut the Extras
Office and administrative fees, from photocopying and paralegal fees to court costs and travel expenses, can cause your bill to skyrocket. Confirm that all services and expenses are included in the price you agreed upon. If they are not, make sure you get an estimate on those costs before you agree to their terms.
If you can’t afford the costs for certain fees, be honest about what you can afford and see if the lawyer would be open to lowering or eliminating specific fees. If your case is unique and your needs are compelling, they may be willing to offer their services for less.
Look Outside Your Area
The fees a lawyer charges are based on a number of criteria, not least of which is their reputation. Lawyers working in big cities are often perceived as more prestigious, so they tend to charge higher rates. Fees are also partly based on state and local licensing fees, so location matters. The bottom line is that lawyers who work outside of major metropolitan areas often have lower fees, so cast a wide net.
Explore Your Options and Find a Cheaper Attorney
Don’t just accept the first offer you hear. Flat-fee cases for simple services like wills and contracts can vary widely, so do your homework and talk to a number of attorneys before choosing one. For cases requiring significant attorney fees, such as personal-injury cases, you may want to shop around. Let lawyers know you’re considering your options, and they’ll be more likely to negotiate.
It also helps to understand where your lawyer is coming from and what leverage they hold. Less experienced lawyers, or practices that are new to your area, tend to charge less than more established ones because they’re trying to build their caseload and establish themselves. If your case is relatively straightforward, a less experienced attorney may get the same results as a more experienced one (though that isn’t always guaranteed).
Consider Nonprofit and Pro Bono Lawyers
Some attorneys will work for free (or significantly reduced costs) on cases that meet specific needs. Clients who demonstrate financial hardship—especially clients seeking legal aid for civil rights issues—are likely to have the best luck finding pro bono representation. The American Bar Association’s Pro Bono Resource Directory can connect you with an attorney in your area.
Do You Really Need an Attorney?
If you’ve followed the steps above and still can’t find an attorney within your budget, you may consider representing yourself in court. But you might not even need a lawyer in the first place. For example, if you’re suing in small-claims court, lawyers aren’t allowed to represent clients. Likewise, you don’t necessarily need an attorney if you’re pursuing a case in mediation or arbitration, which allow you to resolve misunderstandings outside of court.
William Myers is a financial writer based in Dallas.
Illustration by Doug Chayka.
How Can I Build Wealth?
