Wednesday, April 6, 2011

Attorney Fees

Depending on the type of legal matter that you want an attorney to handle, there are several different ways that attorney's fees may be negotiated between the client and the attorney.

These commonly include the following:
     1.  Contingency Fee:  This is the way that the vast majority of attorneys and clients prefer the attorney to represent a client on when the legal matter involves the making of a bodily injury claim, such as arising out of a motor vehicle collision or a premises liability situation.  The attorney is only entitled to a fee if a recovery for the client is had.  The amount of the fee is completely negotiable between the attorney and client, and commonly involves a fee of one-third to forty per cent of the recovery, depending upon when in time the claim is resolved.  Many attorneys charge 40% if the claim proceeds to the filing of a lawsuit, but clients should be forewarned that the actual filing of a lawsuit does not involve a large amount of the attorney's time, at least at that point in time.  If the attorney really wants the case he may agree to take the case for just a third, and sometimes for something less.  It never hurts to ask. 
      If the matter involves the attorney representing a minor child or mentally disabled person in an injury claim, the fees usually have to be approved by the court at a hearing, and in Orange County Superior Court it is typical to allow only 25%, calculated after deducting the out of pocket costs advanced by the attorney off of the top of the recovery.  Contingency fees on medical malpractice cases have maximum contingency fee limits, varying per the amount recovered, and beyond which the attorney cannot ethically charge more, even if the client consents to do so.
     Costs (for photocopying, postage, filing fees, service of process, expert witness fees, court reporter charges, etc.) are separate from fees.  Depending upon the contingency fee negotiated, sometimes these costs are taken off the top before a fee is calculated, while in other instances the contingency fee is based on the gross amount of the recovery, and then the costs are deducted.  Costs may or may not be contingent as agreed to between attorney and client.    
2.  Hourly Fee:  This is the way that many business litigation cases are charged.  An attorney's hourly rate is usually predicated (from the attorney's point of view) on his years in practice and experience in the matter to be retained on.  However, marketprice competitiveness, the type of case, and geographic locale of the attorney (expect to pay more for an attorney who has a "prestigious" business address)  can also enter into the picture.  Most attorneys charge a minimum hourly rate in tenths of an hour for review of documents, telephone conversations, legal research, and preparation of legal documents.  Trips to the courthouse or an outside deposition location are usually charged from portal to portal.  Again, the hourly rate and what the attorney will actually charge you for are completely negotiable.
3.  Flat Fee:  This is a flat rate that represents the only fee the client will have to pay.  Most transaction work (ie., preparing a legal contract or agreement) are charged this way.
4.  True Retainer:  This is an arrangement where the attorney is paid a fixed fee for a fixed time period, regardless of whether or not he actually does any work for the client.  The idea is that for the fee the attorney will make themselves available to the client when they are called.  This usually only makes sense for large corporate clients.
5.  Hybrid Fee:  Many times the above fee arrangements will be combined.  For example, the attorney and client can agree to a fixed fee for a certain amount, plus a contingency thereafter, with the fixed fee to be credited (or not) against the contingency fee.  Another example would be an hourly fee where there would be a pre-determined ceiling, beyond which no further fee would be charged when the bill gets to that amount.

The Legal Right To Recover Attorney's Fees In Litigation:  As a general rule, the prevailing party in litigation is entitled to recover certain of their costs, as defined by statute, but not their attorney's fees.  However, if the matter being sued on arises out of a contract with an attorney's fees provision, or if there is a statute that allows for attorney's fees in certain kind of cases, then the client may be in a position to recover attorney's fees down the road from the opposing party.  It is important in such cases to have a written agreement with the attorney as to how the recovery of such fees will affect their own fees owed to their attorney.  Will their attorney look only to the opposing side for payment of the fees?  Will the client get credit or reimbursement on their bill if attorney's fees are recovered?

THE BOTTOM-LINE:  Talk to your prospective attorney, don't be afraid to negotiate, and whatever you agree to, GET IT IN WRITING.


Monday, April 4, 2011

Retaining An Attorney

Retaining an attorney can be a significant decision that can have permanent ramifications  on the outcome of the matter that you are deciding to retain an attorney on.  Despite that, in the thousands of  interviews that I have had with potential clients over the past 33 years that I have been practicing law, I have noticed that most such people don't ask enough questions about the attorney that they are considering to retain.

Questions that probably should be inquired of any potential attorney would include the following:
     1.  Would you take my case to trial if it can't be settled?  If so, will it cost me more, and if so, why?
     2.  How many cases like this have you tried in your legal career?
     3.  How many cases similar to mine have you handled in your legal career?
     4.  What can you do to make the case more economical for me to take to court?
     5.  Would you consider taking the case for a lesser fee than what you are now quoting me?
     6.  How would you propose to handle my case if I were to retain you?
     7.  What will I owe if there is no recovery on the case?

Unless it is for a very minor matter, costing a minimal amount, clients should insist on a written retainer agreement being signed, and they should read it before signing it.  Don't be pressured into signing a retainer agreement in the attorney's offices the first time that you meet with him or her.  If you do sign a retainer agreement, make sure you get a copy for yourself.

Don't be afraid to first discuss the subject of retaining a potential attorney with someone that you trust, be it a friend or relative or spouse.  Don't be afraid to bring that person with you when you visit the attorney, so that you can both ask questions.

If the legal matter contemplates your being billed for fees and/or costs on a periodic basis, make sure that you let the attorney know that you expect to receive monthly billings.  Review them when you get them and don't be afraid to ask questions if you don't understand the billing.  A client shouldn't be charged by the attorney for answering questions relating to their bill.   

Beware of attorneys that promise results that sound too good to be true on the front end, before all of the evidence and discovery pertinent to your legal matter are on the table.  Litigation can be affected (for better or worse) by all sorts of factors once the case gets underway.

Beware of attorneys who profess to "specialize" in certain areas of the law.  The California State Bar only certifies attorneys as "specialists" in a handful of legal areas, and then subject to the attorney's experience in that area and passing a specialization examination.  There is a difference between an attorney who limits or confines his practice to certain areas of the law, versus an attorney who can accurately and truthfully hold himself or herself out as a "specialist", so be aware of the distinction.

Lastly, an attorney that you can't reach on the telephone or by appointment is the functional equivalent of not retaining an attorney at all.

Communication and questions are a client's best safeguard to obtaining competent legal counsel to handle their particular legal problem.