How Are Lawyers Paid?

There are several types of fee arrangements. The fee arrangement will depend on the type of case, the amount of research, or court time involved, and the length of time it will likely take to resolve the matter. The Rules of Professional Conduct in New York State generally require a lawyer who is retained by a new client to provide in writing to the client the basis or rate of the fee and the scope of the matter to be undertaken. Here are some of the most common fee arrangements:

Fixed Fee

This type of charge is commonly used for routine legal matters, such as a routine real estate closing or a simple will Be sure when you agree to a fixed fee that you are told in advance what services you will receive for the fee. Also ask what is not covered that could result in additional expenses for you.

Hourly Rate

A lawyer sometimes bases the fee on a fixed dollar amount for each hour or part of an hour spent working on your legal matter. Hourly rates can vary, depending on the lawyer. Ask your lawyer about the hourly rate and ask for an estimate of how many hours will be spent on your behalf. Ask if other attorneys or employees at the firm will be spending time on your case and at what rate you will be billed for their time.

Retainer Fees

Businesses and some individuals employ a lawyer on a retainer basis. This means the lawyer accepts a down payment toward a fee for legal services. In exchange for the retainer, the lawyer will be available to work for you on any agreed upon legal matter that may require his or her services. You may have to pay additional costs for services involving extra time and effort by your lawyer. Your lawyer should explain the particulars of your retainer agreement to you in advance, since there are several different types of retainer agreements.

Contingency Fee

This type of chare is commonly used in accident cases involving personal injury, when you are suing somebody for money. The fee is contingent upon the lawyer obtaining a monetary award or settlement for you. The lawyer is entitled to a certain percentage of the money if you win or settle out of court. If you loose, the lawyer does not generally receive a fee. Be aware when you agree to a contingency fee arrangement that you are usually responsible for paying any court costs and other litigation expenses, like the cost of expert witnesses, whether you win or settle out of court. These costs and litigation expenses may be deducted from the monetary award you receive. Make sure you know in advance the lawyer’s percentage of the award or settlement and whether the lawyer’s fee will be paid before or after court and other costs are deducted. A lawyer is required to give you a written copy of a contingency fee agreement. Contingency fees are not permitted when representing a defendant in a criminal case or in a client in a domestic relations matter involving divorce, alimony or support (or a property settlement in place of alimony or support).