Not every legal matter is the same. Every case is not only distinguished by its facts but also by its procedure. The uniqueness of each case is also reflected in the different billing procedures. Almost all good attorneys will require a client to enter into a written agreement that will list their duties and responsibilities. This agreement will also list the clients rights and responsibilities as well as the agreed upon fee. Sometimes the different fees can be confusing, so this is a brief explanation of the most common billing practices.
A fixed attorney fee means that for a certain service you will pay a definite amount. For example, an attorney may charge you $1,000.00 to represent you at your preliminary hearing. Or, an attorney may charge you $2,000.00 to help you through a minor criminal offense. Most often, fixed fees are due prior to the attorney beginning work. It’s a good method to use when the legal process is finite. That is, when the steps that need to be taken are well known by the attorney and when the client has a set goal in mind.
Some common times when fixed fees are used: Property transfers, probate matters, basic criminal matters (generally not trials and appeals), Qualified Domestic Relation Orders (QDRO) business closing documents and basic will drafting.
Examples of some fixed fees
– Simple Will Packages start at $800 and include a Health Care Directive and Power of Attorney. Deeds and filing fees are extra.
– Revocable Trusts for an individual start at $1,200.
– Single member LLC with a standard operating agreement start at $750 and include all applicable filing fees.
– DWI start at $2,000 and include representation in all criminal proceedings (in the initial court) and MVD proceedings.
Hourly billing is the more traditional approach to paying an attorney. An hourly rate is set for the work to be done, and the attorney tracks the hours he or she spends on the work, often down to the tenth of an hour (a client would be billed for every 6 minutes of work). A good attorney will also track what is accomplished during each time period, and the hourly rate may differ if the work is research and writing, time in court, or travel time. Hourly rates also vary depending on where the attorney is located and the area of law in which he or she works.
Hourly billing can sometimes seem daunting for the client because it is unknown how much the final fee will be. But some attorneys are able to make fairly accurate estimates of the time it takes to do things, especially if he or she has been working in that field for a while. Most often a client will have to pay an initial amount, called a retainer, and the attorney will use that amount to begin paying the hourly fees. The client will be asked to add to the retainer as it is depleted.
Hourly clients will often receive a bill at the end of the month. The bill will accurately show how much time was spent on their legal matter during the previous month and what specifically the attorney was accomplishing. The attorneys review these bills for accuracy every month before they are sent to their client. Most clients are unaware of the amount of work an attorney must do outside the client’s presence and a bill serves as a means of keeping the client up to date on the day to day activities of their legal or business matter.
Some common times when hourly fees are used: trial and preparation for upcoming trial (whether civil or criminal), appeals work, estate planning, complicated divorce actions (disputed or when children are involved), custody hearings, motion hearings, or when projects are indefinite in scope or subject (like just keeping an attorney on retainer for business consultations).
Contingent fees are like a combination of fixed fees and hourly fees. A contingent fee means that the attorney getting paid is contingent (relies on) the client winning some money at trial or in a settlement. The attorney will take some percentage of the money won as payment; this percentage is determined at the time the client hires the attorney. Sometimes clients are required to pay for all filing fees and court costs, but otherwise the client is not responsible for any payment if the case is lost.
The hourly part comes in if the attorney is fired prior to the settlement. Then the client often owes the attorney his or her normal hourly rate for work already completed. Again, an attorney will track these hours and will often keep the client updated about how much time has been spent on the case.
Some common times when contingent fees are used: anytime there is a civil lawsuit and a money settlement is expected (car accidents, employer discrimination, civil rights claims, worker’s compensation claims).
Contingent fees are not permitted in some situations because it is considered bad for the public. No contingent fee agreements are allowed in divorce cases, child custody cases, criminal cases, and other similar issues where paying the attorney more for winning does not promote the good of all persons involved. Many times state ethical rules and laws will specifically forbid an attorney from working on a contingent fee basis.
Costs and Taxes:
Almost all legal matters have certain fees and costs associated with them. Whether it is the court’s filing fee to start a lawsuit or the money needed to pay an expert in a case, the expense of a legal matter will vary depending on the type of case or a clients. Who pays these costs will also depend on the fee arrangement between a client and their attorney. In fixed fee and hourly billing cases it is often the client who is responsible for the costs incurred, and in a Contingency fee case it is often the attorney who will carry the burden of costs and fees until a settlement is reached and they can be reimbursed.
Some common fees and costs include: filling fees, expert witnesses, private investigators, exhibit preparation, travel, case consultants, and taxes.
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Barnett Law Firm
1905 Wyoming Boulevard NE
Albuquerque, NM 87112
Telephone: (505) 275-3200
Fax: (505) 275-3837
We are an experienced Albuquerque general civil practice law firm serving Bernalillo County, Sandoval County, Torrance County, and Valencia County, including the towns of Albuquerque, Rio Rancho, Los Lunas, Torrance, Edgewood, Moriarty, Kirtland Air Force Base, and Sandia National Laboratories