How Do Lawyers Charge?
YOUR LAWYER SERVES YOU
Lawyers are licensed professionals who have many years of training. Their only stock in trade is time and advice, and therefore, a charge is made for them. An attorney is entitled to be paid for services rendered at professional rates. This pamphlet speaks frankly about these charges and how they are applied.
WHAT WILL IT COST?
Most people prefer to know in advance what a service will cost, and what goes into that cost. Those visiting a lawyer are no exception. The solution is simple. When you first consult a lawyer about the matter, ask about the fee. Your lawyer will want you to be satisfied with both the services and the charge. Everyone knows that if good service is given and the charge is fair, you will return and you will refer others to your attorney. This is how a lawyer builds a practice.
ELEMENTS IN FIXING A FAIR FEE
Legal matters differ widely. No two situations are exactly alike. The lawyer’s fee will depend upon a variety of factors. The Code of Professional Responsibility, adopted by the Supreme Court of Virginia and governing the conduct of lawyers in Virginia, sets forth these guidelines:
FEES FOR LEGAL SERVICES
A lawyer shall not enter into an agreement for, charge or collect an illegal or clearly excessive fee.
A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee. Factors to be considered as guides in determining the reasonableness of a fee include the following:
1.
The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly.
The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly.2. The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.3. The fee customarily charged in the locality for similar legal services.
The fee customarily charged in the locality for similar legal services.4. The amount involved and the results obtained.
The amount involved and the results obtained.5. The time limitations by the client or by the circumstances.
The time limitations by the client or by the circumstances.6. The nature and length of the professional relationship with the client.
The nature and length of the professional relationship with the client.7. The experience, reputation, and ability of the lawyer or lawyers performing the services.
The experience, reputation, and ability of the lawyer or lawyers performing the services.8. Whether the fee is fixed or contingent.
Whether the fee is fixed or contingent.A lawyer shall not enter into an agreement for, charge or collect a contingent fee for representing a defendant in a criminal case.
With these points in mind, how does a lawyer then set a fee? In practice, an attorney will give much weight to the following factors in arriving at a fair fee:
1.The amount of time spent on the matter is always important. Most lawyers keep accurate records of time spent on each matter. Also, the time of other lawyers and of office staff may be spent on your legal matter. Different lawyers value their time at different rates because of variations in their experience, special knowledge and skill, and office expense. There is a degree of uniformity based on what other lawyers in the community with similar ability and experience charge on what is required to pay office costs and to provide a fair income to the lawyer. Attorneys will often handle matters on a straight time basis.
The amount of time spent on the matter is always important. Most lawyers keep accurate records of time spent on each matter. Also, the time of other lawyers and of office staff may be spent on your legal matter. Different lawyers value their time at different rates because of variations in their experience, special knowledge and skill, and office expense. There is a degree of uniformity based on what other lawyers in the community with similar ability and experience charge on what is required to pay office costs and to provide a fair income to the lawyer. Attorneys will often handle matters on a straight time basis.2.Ability, experience and reputation are important. A lawyer normally has at least 19 years of formal schooling and must have passed a difficult examination before being licensed to practice in Virginia. The training, combined with later legal experience, constitutes a lawyer's legal education. A legal education is a lawyer’s investment. An experienced attorney may be better trained to handle your special problem. If a lawyer is well-known as an able practitioner of proven ability or a specialist in a particular field of law, the charge may be more than for someone not so well-known because the services being rendered are in special demand. The situation is similar to that in the field of medicine. Professional people are not hired on a bid basis, or on the basis of who works cheapest
Ability, experience and reputation are important. A lawyer normally has at least 19 years of formal schooling and must have passed a difficult examination before being licensed to practice in Virginia. The training, combined with later legal experience, constitutes a lawyer's legal education. A legal education is a lawyer’s investment. An experienced attorney may be better trained to handle your special problem. If a lawyer is well-known as an able practitioner of proven ability or a specialist in a particular field of law, the charge may be more than for someone not so well-known because the services being rendered are in special demand. The situation is similar to that in the field of medicine. Professional people are not hired on a bid basis, or on the basis of who works cheapest3.A lawyer must consider office overhead expense. When you hire an attorney, you are hiring the whole law office to work for you. In Virginia, the office expenses of practicing law often exceed more than 50 percent of all gross fees charged by a lawyer.
A lawyer must consider office overhead expense. When you hire an attorney, you are hiring the whole law office to work for you. In Virginia, the office expenses of practicing law often exceed more than 50 percent of all gross fees charged by a lawyer. An attorney must maintain an office, employ competent personnel and, in many cases, purchase and maintain a rather expen
sive library. Moreover, a very significant amount of the office time of the average Virginia lawyer is not billed to any client.
4.The relationship of the lawyer and the client also must be considered. With a continuing relationship, involving the payment of a continuing retainer, the charge for a particular matter may be less than if the employment is on a one-time or casual basis. A client, in evaluating the worth of an attorney’s services, should also realize that, by accepting employment from the client, the lawyer and all the partners and associate lawyers are thereby precluded from accepting other representation which conflicts with the client's interest, so long as the employment continues. Also, the client's ability to pay is a factor to be
The relationship of the lawyer and the client also must be considered. With a continuing relationship, involving the payment of a continuing retainer, the charge for a particular matter may be less than if the employment is on a one-time or casual basis. A client, in evaluating the worth of an attorney’s services, should also realize that, by accepting employment from the client, the lawyer and all the partners and associate lawyers are thereby precluded from accepting other representation which conflicts with the client's interest, so long as the employment continues. Also, the client's ability to pay is a factor to be considered by the attorney, and a candid discussion of this aspect by both lawyer and client can be helpful, when necessary.
OFTEN AN EXACT CHARGE CANNOT BE SET IN ADVANCE
Frequently a lawyer cannot tell you exactly what the charge will be because it is not fully known how much work is involved. But your attorney can usually estimate what the minimum and maximum limits of the fee will be for that particular work, or give you some idea of the problems involved and of the time that will be required.
Estimating a fee is often difficult. It is like asking, “What will you charge to paint my house?” Obviously, no painter could quote a price without knowing more about the house and what is needed.
Sometimes a legal fee is fixed by law or the court. Normally, however, the lawyer and client are free to agree upon the fee.
WHEN DO YOU HAVE TO PAY?
The time for payment of legal fees depends on the arrangement. Usually, the lawyer will require a fair down payment or “retainer” to cover the initial work and disbursements. In other matters, you will be billed at the end of the month, or on completion of the service, for services and expenses.
If you are uncertain as to whether you will be able to pay promptly, talk it over with your lawyer. You will be able to make an arrangement that is fair.
ABOUT CONTINGENT FEES
Lawyers who represent injured persons usually handle the matter on a “contingent fee” basis, although you may retain an attorney on a guaranteed per diem or hourly basis. If a contingent fee is agreed upon, the lawyer is paid only in the event the client wins the case. His fee is a percentage of the amount recovered, less certain expenses. This arrangement has certain advantages for persons who need legal services but do not have funds available to pay fees if they should recover nothing.
The percentage at which the lawyer agrees to be paid depends upon many factors, such as the possibility that the suit may be lost altogether or will involve a lengthy trial with only a small, if any, judgment likely. These fees are not set by the court and should always be discussed and agreed upon between the client and lawyer in advance.
WILLS AND ESTATE PLANNING
A lawyer will usually draft a simple or short-form will for a modest fee, but if a longer form of will is required, or a will involving marital deductions and a trust is involved, the fee may be substantially higher.
Generally, estate planning and will drafting require some inquiry into the nature of the client's assets, his or her personal and family situation, as well as his or her individual desires. The amount of time spent, and thus the amount of the lawyer's fee, is largely determined by the size of the estate and the complexity of the questions involved.
Estates. The commission charged by a lawyer qualifying as administrator or other fiduciary to administer an estate when a person dies must be approved by a court. These fees are usually calculated on a percentage not exceeding five percent of the gross value of the estate's assets being administered. With a large estate, the fee often is based on a much smaller percentage. However, in all cases, the court will insure that any fee allowed is reasonable. A person may specify in his or her will the fee to be received by his or her named executor. A lawyer also may be retained as counsel to advise another person as executor or administrator of an estate, with the charges also subject to court scrutiny.
Property Transactions. Buying or selling a home or other property may well be the largest single transaction the client will ever have, and may involve the client's life's savings. In these matters, involving a purchase offer, title examination, the drafting of agreements and other documents and closing the sale, a flat percentage may be charged, depending on the complexity and size of the transaction.
Divorce. Lawyers and their clients may agree on any reasonable fee arrangement, considering such factors as whether the divorce will be uncontested and questions of alimony and child support. However, many women who sue for divorce because of the wrongful conduct of their husbands have no money to pay their lawyers. In such cases, the court may order the husband to contribute to the wife’s legal fees. Where the husband has a high earning capacity, where the divorce is contested, where considerable property is involved, or if it appears that an unusual amount of work or responsibility is involved, the fees may be much higher than otherwise.
Advice and Counsel. The “advice” of a lawyer does not mean an offhand personal opinion. This conclusion is reached after analyzing the facts and the law, and after perhaps hours or days of searching through many volumes of law. Usually, this form of counseling is charged on a time basis.
PREVENTIVE LEGAL SERVICES
Every lawyer is familiar with a situation where someone has tried to do his or her own legal work. When he or she finally brings it to an attorney, the damage may be irreparable. At best, the cost of remedying the situation will be many times higher than the lawyer would have charged to do the work in the first place. Much preventive law work is charged on a time basis.
An hour of prevention is almost always worth days or weeks of litigation. For instance, if you buy a printed form of lease, will or contract for 15 cents and litigation develops because that form was not prepared exactly for your situation, settling or litigating the dispute may be costly either for you, your spouse and children or your other heirs.
WRITTEN FEE AGREEMENTS
Written fee agreements are encouraged but not required. Such an agreement can clearly provide for the basis of the lawyer’s fee; i.e, whether it is a fixed fee, hourly rate, contingent fee or some combination. It should also specify how costs are to be paid and how and when the fee is payable. Such an agreement should be discussed at your first meeting with the lawyer.
CONCLUSION
Many persons who need legal help are reluctant to see a lawyer because they have heard that the legal services are expensive. Actually, fees are small in comparison with the benefits gained or losses avoided. Often, no specific fee can be set in advance because various cases have different facts, require different amounts of time and skills, or involve different amounts of property or money. Lawyers as a group are extremely anxious for their clients to be satisfied with any fees charged for services rendered. Your attorney will be pleased to answer your questions on fees at any time and you need not proceed unless you think it advisable..
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© Richard P. Buzan, P.C. 2011
Richard P. Buzan, P.C.
A Professional Law Corporation
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3919 Old Lee Highway, Suite 81-C, Fairfax, Virginia 22030
Telephone 703-918-4873
Fax 703-935-8296
E-mail Richard.Buzan@Buzanlaw.com
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