Retainer…hourly…fixed fee…contingency fee…usually, it just depends.
Fixed Fee. Certain types of legal work are easier to price so an attorney may have a fixed fee. For example, on a residential real estate closing, a traffic ticket, or maybe a will. The attorneys fees are generally fixed fees because they typically follow some standard procedures and workflows. On other cases, an attorney may be willing to quote a fixed fee after meeting with you and learning more about your case – this would be the typical procedure in a criminal case like a DUI.
Hourly. When you hire an attorney, what you are buying is that attorney’s time. They have some expertise and you want them to apply it to your situation. When your legal matter is of an uncertain duration or the attorney can’t quantify how long it will take to resolve, then the attorney will want to charge by the hour. As such, the attorney will bill you for their time in increments of maybe 15 minutes, or even 10 minutes or maybe even 6 minutes. The smaller increment of time is better for you the client so be sure to ask. For example, if you are being charged in 15 minute increments that means you could have 4 separate phone conversations that last 3 minutes each and you will be charged 15 minutes for each phone call, thereby totaling 1 hour of time. If your attorney bills you at $300 per hour then those little, quick phone calls just cost you $300 bucks. Also be sure to ask your attorney how they bill for emails or even text messages. When you hire an attorney on an hourly basis, you usually make an initial payment which is called a retainer. Think of a retainer as pre-paying for some of the attorney’s time. Let’s assume a divorce case where the attorney is billing $300 per hour. The attorney may require a $3,000 retainer which is equal to 10 hours of time. Once the attorney starts working on the case, they will bill against that retainer. In other words, as they spend time on your case, they are earning the money that you have paid them in the retainer. Once the retainer is gone (the attorney has spent 10 hours on your case) they may want you to make another payment to replenish the retainer.
Contingency Fee. A contingency fee is typically used in injury cases like car wrecks, medical malpractice, nursing home abuse, etc. In this arrangement, the attorney only gets paid if there is a verdict or settlement or some type of recovery. No recovery means no attorney fee. As you can see from the hourly description above, legal fees can escalate pretty quickly. If someone is injured in a car wreck, they may or may not have a car, they may not be able to work, they will likely have medical bills piling up – they may not be able to pay an attorney on an hourly basis to pursue their case. So a contingency fee arrangement usually works best in these situations. The attorney will want to know the details of the situation before accepting the case and based on their assessment of the likelihood of winning the case or a settlement, the attorney may agree to accept the case. A common contingency arrangement is 1/3 of the recovery. Assuming a verdict or settlement in the amount of $300,000, the attorney fee in a 1/3 contingency arrangement would be $100,000. Depending on the amount of work involved, that may seem like an excessive amount of money for the attorney. But, without a contingency fee arrangement, most people would not be able to pursue their case.