Tips About Lawyer Fees

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The amount your lawyer charges is based on the lawyer's overhead, reputation, type of legal problem and what other lawyers in the area charge for similar work. For example, sometimes there’s an informal “going rate” in a particular locality for certain tasks, such as handling an eviction, filing a bankruptcy, or preparing a living trust. But even when most lawyers charge about the same for a defined legal task, you'll have no problem finding lawyers who charge less, especially in parts of the country with a large surplus of lawyers. Here are some things to keep in mind.

The cheapest lawyer is not necessarily the best. A novice who charges $100 an hour may end up costing more than an expert who charges $250 an hour if the more expensive lawyer has much greater expertise and experience and provides better and more efficient service. If you need a seasoned practitioner, the cheapest fee might lead to an expensive disaster.

Expensive isn't necessarily best, either. The most expensive lawyers may be selling you the image that comes with a posh address, a thick carpet, and a great view. Consider the complexity of your problem. You probably don't need a sophisticated corporate attorney to draft a simple business contract.

Contingency fees aren’t always the best. A contingency fee—where a lawyer gets paid only if you win—can be a good deal when the attorney is taking a big risk, but not when little risk is involved. If it’s clear that you or your property were seriously injured and another person who is covered by insurance was at fault, the attorney may be proposing to take a hefty cut (usually 33% to 40%) of a sure thing. This is especially true if the attorney figures the case can be settled with a few phone calls. In cases like these, you may be better off paying an hourly fee.

Don’t bet your house. Steer clear of any lawyer who asks you to mortgage your house to guarantee payment of the lawyer’s fee (or to pledge other property) if you lose the case. These agreements aren't legal in most states, but even where they are, it's a tip-off that the attorney is more concerned with getting paid than with winning your case. If you cannot otherwise afford to hire a lawyer and must consider this type of offer, at least have a second attorney review your case and the agreement.

Keep an eye on bills. You should go over your lawyer’s monthly bills carefully. Every item should be explained—if the bill just charges a lump sum for “legal services,” you should ask for an itemization. And if you don’t understand an item—there are travel expenses that you didn’t know were coming, or hours of legal research that you didn’t expect, ask the lawyer to clarify.

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