Agreement for Legal Services - Hourly Rates/More info


  Agreement for Legal Services - Hourly Rates
Additional Information
Ethical Considerations
 
The Model Professional Rules of Conduct for the legal profession recommend that new clients be advised, preferably in writing, about the basis or rate of legal fees within a reasonable time after the law firm begins to represent a new client.  Many states have more stringent requirements.  For example, the state of New Jersey requires that the basis or rate of the fee be put in writing and, if the services are for personal, family or household purposes, the agreement be written in plain language.  

While the Agreement for Legal Services - Hourly Rates can help to make sure that the parties agree on all important items, the most important is the lawyer's fees.  The most common complaint against lawyers involves the amount charged for legal services.  These complaints could be substantially reduced by clearly defining in a written agreement not only the charges for the lawyer's services, but by also defining charges, if any, for things like secretarial services, photocopying and other items that may be "passed through" to the client.  

Like most parts of the lawyer-client relationship, the matter of fees is negotiable.  The parties may agree to a variety of different fee arrangements, such as a flat fee, retainer, contingent fee or the most popular, hourly.  In this situation, the lawyer keeps track of his or her time spent on the client's matters and charges a fee based upon an agreed amount per hour.  The hourly fee can vary greatly depending upon the lawyer's age and experience, the complexity of the matter, the lawyer's location (big city or small town), and the demand for the lawyer's services.  In some cases, a client may pay $50 an hour or less.  In major cities, some corporate lawyers charge $300 an hour or more.   

As a part of the process of negotiating the hourly fee, ask the lawyer what his or her most favorable rate is.  This is the rate that the lawyer charges to those clients that produce the most work or have been using the lawyer for the longest time.  You may not get this rate, but it can give you an idea of how much you might have to pay. Also ask your friends and business acquaintances how much they have paid to other area lawyers for similar services.                                                                                                            

Other Arrangements

This form of agreement contemplates that the lawyer will charge for basic services on an hourly rate.  However, an attorney representing a plaintiff in litigation (someone pursuing a claim against another person or company) may charge a "contingent fee".  This means that the lawyer collects a fee only if there is some recovery on the plaintiff's claim.  The amount of the fee is usually stated as a percentage of the claim that is recovered.  Contingent fee arrangements are not appropriate in criminal law matters, for defendants in civil suits, nor in other situations.  The application provides separate forms for contingent fee and flat fee arrangements.   

Other Matters
 
In addition to covering fees, a good agreement will address other items, such as the right of the primary attorney to delegate the client's work to other attorneys or paralegals in the firm, whether the law firm may employ outside consultants, such as investigators and experts, and a clear statement of the services to be performed.   

It is not unusual for an individual or business to have more than one law firm that provides services.  For example, a business may have general corporate work provided by one firm, its labor matters handled by another law firm, and any litigation handled by still another.  Whether you get all of your services from one large firm, or spread legal work around, is largely a matter of the client's discretion.  Some individuals and businesses like to know that all (or at least most) of their legal needs can be met in one place.  Others have developed their own network of individual lawyers with expertise in a particular area.   

What If You're Not Happy With Your Bill? 

Do not hesitate to talk to your lawyer if you think you have been charged too much.  Before you have that discussion, tell your lawyer that you do not want to be charged for the time spent discussing fee matters.  

If you are still not happy with the result, you may take your complaint to the state or local bar association.  Many local bar associations have mediation or arbitration services for handling these disputes.  Ask if these services are available.  

Litigation Reform 

There has been much discussion in recent years about the need to bring reform to existing litigation rules.  Critics want to prevent groundless litigation and to put limits on how much courts can award plaintiffs in damages.  Some states have already enacted reforms, such as Oklahoma and Oregon.  In these states, a plaintiff who sues for certain kinds of torts and loses may be required to pay the defendant's court costs.  Be sure to discuss with your attorney whether any of these new rules may apply to your proposed lawsuit.