Hiring a lawyer can often be daunting. “How much will it cost?” you ask. Instead of an articulable figure, you may get something along the lines of “it depends.” Frustration sets in as you think back to the last day you went car shopping. But it does not have to be that way. In recent years, more and more attorneys have begun using alternatives billing options that can satisfy your desire to know the price. Being aware of these alternative arrangements can help you in finding a lawyer whose billing practices fit your needs.
Incremental Hourly Billing
Hourly billing is perhaps the culprit behind the “it depends” price tag. Its use certainly has some reasons. For one, no case is alike. As such, accurately approximating the amount of time an attorney will spend on the case may be next to impossible. This is even more so an issue in litigation, where multiple parties are involved. There, the opposing side could be unresponsive, necessitating an unexpected court intervention and thus more work.
Yet, clients are not always thrilled at the prospect of an unknown price. Especially given the amounts that are often at stake. As reported by the ABA Journal, in 2012, the average hourly billing rate was about $536 for partners and $370 for associates. With average hourly rates exceeding the daily income of many people, the prospect of paying a “little” extra for an attorney’s potential traffic delay on the way to court may be off putting.
Clients’ worries are sometimes even more accentuated by how hourly billing is calculated. While its name may imply that you pay for the attorney’s actual time spent on your case, it is not always that simple. Ordinarily, firms do not bill for the actual time spent. Rather, they bill in fractions of the hour, usually six-minute increments. Thus, if an attorney spends 3 minutes on a phone call for your case, you may end up paying for the whole six-minute fraction. Similarly, a seven-minute task will cost you as much as a ten-minute one.
In the end, much can be said about the drawbacks of hourly billing. Those who are charged for each call they make to their own attorney may be discouraged from sharing pertinent information with their own counsel. This system may also drive up the hourly rate. After each task, your lawyer or his or her assistant has to document in detail what the lawyer did. Although that time is usually not billed to the client, to make up for lost billable time, the client still ends up paying for it in the form of a higher hourly rate. The good news is that alternatives do exist and a number of them are described in detail below.
Actual Hourly Billing
Although billing by actual time rather than in increments of an hour seems like a step up, it is not widely practiced. It also does not provide any more clarity for a client as to the ultimate price and the same drawbacks listed above apply.
“Fixed” or “flat” fees are certainly desirable for clients wishing to know how much they will spend from the start. This type of arrangement has also found its way to many aspects of law. Immigration attorneys and estate planning lawyers, for example, frequently utilize flat fees in their cases. This does not mean that fixed fees are without headaches for both lawyers and clients.
Again, think of a litigation case where the opponent’s actions dictate how much work is necessary on your side. Lawyers are not clairvoyant and may be hesitant to enter into a flat fee agreement in such a case. Also, imagine a situation where you have paid your full fixed fee but a couple steps into the case you decide to fire your lawyer. How much do you get back? As always, it is important to discuss these issues with your attorney beforehand and carefully read your fee agreement.
Task-based billing provides somewhat of a compromise between the definiteness of a fixed fee and the uncertainty of hourly billing. Under this approach, clients are billed for particular aspects of the case based on a fixed schedule. So, each phone call may cost you $10 no matter its length, each court appearance may cost $200 no matter how far. Although you may not know the final price at the onset of your case, this method may help alleviate some of the fears that hourly billing poses.
People seem to love contingency fees. The basic premise is that a client does not pay any legal fees upfront and instead agrees to pay a percentage of the final recovery to the attorney. If the client loses, neither the client nor the attorney will get any money. Since a monetary recovery is expected in a contingency situation, such fee arrangements are not applicable in all case. Another drawback of contingency fees is that you may end up paying more than you would under an hourly billing system if your case resolves quickly.
At Holborn Law APC, we utilize a variety of billing options, including flat fee, task-based billing, and contingency. While not all options fit every case, we make every effort to listen to and address our client’s billing concerns. If you are interested in receiving advice regarding your legal question, contact us at 1-844-HOLBORN and one of our attorneys will be happy to assist you.
Disclaimer: This post is meant for general informational purposes only, and it is not to be construed as legal advice. Holborn Law APC does not endorse any linked content. As with any laws, the information in this blog post may change at any time and may apply differently in different jurisdictions. The post may constitute Attorney Advertising as defined by the rules of professional responsibility of some jurisdictions. Holborn Law is based in Orange County and Riverside.The attorneys of Holborn Law APC are active members of the State Bar of California and licensed to practice law in California. All services relating to immigration and naturalization provided by Holborn Law APC are provided by active members of the State Bar of California or by a person under the supervision of an active member of the State Bar of California.