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Fee Agreements and Disputes

Legal Malpractice – Fee Agreements and Disputes

A common complaint from clients is that they never know what to expect in terms of payment for their lawyers’ legal services, and do not understand their options if they disagree with something that occurs in the payment process. If you feel you have a valid dispute with an attorney about legal fees, consult a different lawyer to explore your legal remedies.

Much of the confusion over legal services can be avoided through an understanding of the fee agreement process and what a typical fee agreement will cover. Following are a few helpful guidelines on how a fee agreement with a lawyer will generally work, and what you can do if a dispute arises over the agreement.

Injury or Accident Cases: Most personal injury cases are charged by contingent fees, meaning that the lawyer agrees to take a certain percentage of the settlement, usually one-third. If the victim does not win the case, there are no lawyer’s fees.

Civil and Divorce Cases: Such cases are billed on an hourly basis, which can vary greatly from case to case and lawyer to lawyer. Factors such as the lawyer’s experience and type of case will affect hourly pricing.

Retainers: A retainer represents a certain number of hours at a set price, often an estimate of the total cost. A client pays a retainer in advance.

Criminal Cases: A flat fee paid up front is normal pricing practice for criminal cases. Because of the intricacies of a criminal case, pricing usually doesn’t lend itself to contingent fees or hourly rates, as these cases typically involve numerous and complicated legal procedures.

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Fee Agreements

Your fee agreement should set out the services the lawyer will perform for you, the type of fees, and the amount you will be expected to pay. The agreement should also identify how other costs will be handled, and should explain the lawyer’s billing practices.

In your initial meeting with your lawyer, you should discuss the lawyer’s fees and the fee arrangement. Your discussions with your lawyer about fees and costs might cover the following topics:

  • Type of Fee Arrangement: How will the lawyer bill, such as hourly, on contingency? Also, will a retainer be required?
  • Type of Permissible Costs: Which costs are passed on to you, such as copying and on-line legal research?
  • Estimated Fees and Costs: What will the case cost? The lawyer should be in a position to give you a “ballpark” estimate of both fees and costs based upon past experience.
  • Frequency and Detail: How often will you be billed, and will interest or other charges be added to unpaid amounts? The lawyer’s bills should include details of the services provided along with itemization of costs.
  • Basic Charges: If the lawyer charges by the hour, you should find out the minimum billing segment. Is it one-quarter or one-tenth of an hour or some other figure? You should also find out whether you will be billed for work by others — associates, legal assistants, or paralegals.
  • Control: How much control will you have over fees and expenses? Do you want to be notified after fees and expenses reach a certain amount? Do you want to be notified before the lawyer incurs an expense over a certain amount?

Fee Disputes

If you think your lawyer’s bill contains an error or something that you did not agree to, you should contact the lawyer immediately and try to resolve the problem directly. If you cannot resolve your problem, many state and local bar associations offer fee arbitration programs. Arbitration panels and committees offer an out-of-court forum to settle disputes between lawyers and their clients. Generally, arbitration is a simpler process than going to court. Typically, either the client or lawyer involved in a fee dispute can request arbitration by writing the appropriate authority. Both parties need to agree to the process. A lawsuit against your lawyer is another option (whether for legal malpractice or breach of contract) if you believe that you are being overcharged, or that your attorney has violated the terms of your agreement.

If you suffered a loss due to the conduct of a lawyer, you may be entitled to recover some of your losses through a client trust fund established in association with a state bar or through a state court. Typical losses reimbursed by such funds include theft of estate and trust assets, escrow deposits in real property transactions, settlements in personal injury litigation, debt collection receipts, money embezzled in investment transactions with law clients, and unearned fees paid in advance to lawyers who falsely promise their legal services.

If you feel you have a valid dispute with an attorney about legal fees, consult a different lawyer to explore your legal remedies.

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.