Different Types of Attorney Fee Arrangements

Individuals who have never retained a lawyer before may not be familiar with the different types of attorney fee arrangements available at many law firms.  Although numerous people know from movies and television shows than many law firms charge by the hour, most may not know that other fee arrangements are available.  Indeed, there are several different types of attorney fee arrangements offered by many law firms, including The Rothman Law Firm.

Billable Hour

Many attorneys typically charge a standard rate per hour for their services.  Lawyers usually charge a client in six-minute increments, so if an attorney spends 1.3 hours on a matter, they will typically charge 1.3 times their hourly rate to a client.  The billable hour has some benefits to clients, since it ensures that an attorney has the freedom to conduct as much work as is necessary to complete a given legal matter.

However, the billable hour has a number of drawbacks.  It is difficult to predict how long an attorney will spend on a given matter, so the billable hour can create some surprises for clients.  In addition, if an attorney is mindful of trying to keep a bill low, they may not devote as much attention to a matter as they would if different types of attorney fee arrangements are used.  The Rothman Law Firm offers clients the option of charging by the hour, but different types of attorney fee arrangements are often preferred by clients.

Flat Fees

Flat fee arrangements allow an attorney and client to establish one fee that will be charged for handling a given matter.  During a longer attorney-client engagement, such as filing a lawsuit, flat fee arrangements often involve additional payments when the case proceeds to different milestones in the litigation. 

Flat fees eliminate surprises for clients, since everyone understands at the beginning of the representation how much money will be charged.  In addition, an attorney does not need to be afraid of conducting too much work on a matter under a flat fee arrangement, since they are being paid one sum no matter what.

However, it is oftentimes difficult to estimate how much time it will take to resolve a given matter.  Sometimes, a matter will resolve itself without an attorney conducting too much work.  Other times, an attorney needs to conduct more work on a matter than was originally envisioned by the parties when agreeing to a flat fee arrangement.  Of the different types of attorney fee arrangements, clients usually favor flat-fee agreements.  These arrangements ensure that there are no surprises for clients and is usually more reasonable for all parties.

 Contingency Fee Agreements

Sometimes, attorneys take cases on contingency.  This means that clients do not pay attorneys any money for their services, and lawyers pay all of the expenses associated with taking a case.  In exchange, the attorney and client agree that the attorney will be entitled to a percentage of a recovery if the attorney is successful.  Although the percentage of the contingency fee can vary, this is usually around a third of the recovery.  If the attorney does not prevail in a matter, the client does not owe the attorney any money, and the lawyer does not receive any compensation.

Certain types of legal matters are typically subject to contingency fee arrangements.  For instance, personal injury lawsuits usually have contingency fee arrangements.  In addition, debt collection matters and other commercial issues may also be subject to contingency fee agreements.  The Rothman Law Firm is amenable to taking personal injury cases and other matters on contingency, and this arrangement can be beneficial to attorney and client alike.

Reduced Fees

There are some situations in which parties themselves do not pay their own legal fees.  For instance, parties who have insurance may have their legal defense paid for by an insurance company as well as any payments that must be made to settle a lawsuit.  Sometimes, clients are allowed to choose their legal counsel even if the insurance company is responsible for the defense and will pay for all attorneys’ fees.

However, insurance companies typically have a number of rules and procedures attorneys must follow in order to be paid by an insurance company.  In addition, insurance companies typically only pay law firms a lower rate than firms typically charge clients.  This is because insurance companies typically provide a large amount of cases to firms, so in exchange for this volume, insurance companies are able to pay lower sums of money to attorneys.

Some law firms are willing to accept the reduced fees paid by insurance company to represent a given client.  Indeed, The Rothman Law Firm should be able to reach an agreement with an insurance company and ensure that we will be paid by an insurance company to represent clients that may be covered by insurance.  This situation varies from the different types of attorney fee arrangements noted above, since clients get to choose their legal counsel and have their expenses paid by another party.

The Rothman Law Firm is very flexible when negotiating different types of attorney fee arrangements.  Our primary concern is providing value to clients, and we are willing to implement a number of different fee arrangements.  If you have a matter that you wish to discuss with an experienced New Jersey and New York attorney, please feel free to contact The Rothman Law Firm to request a free legal consultation.