Like any professional, lawyers get paid for their expertise. This doesn't mean that it's always easy to understand the way they bill clients for the work they do. It varies from the type of lawyer you're working with, and among individual lawyers.
The two general types of ways lawyers charge are by the hour, or "on contingency," meaning they get paid only if you win your case. Some lawyers require a retainer, and some don't. It varies and the differences in billing can often lead to a big surprise when you get the final bill for their services.
Read Your Fee Agreement
It's important to thoroughly read your fee agreement before signing it. Make sure you understand how your lawyer will bill you. Pay careful attention to what the fee agreement says about:
- How often you're billed
- Whether you're billed for faxes and copying, and if so, how much
- Whether you're alerted before your billing exceeds a certain amount
- At what rate you're billed for paralegal and assistant work
- Whether other lawyers or experts will work on your case, and if so, how much you'll be charged per hour for their services
- Any estimate of the total billed amount
Be sure to ask questions any time you receive a bill and don't understand what it means.
If you don't understand the bill, or it isn't itemized, ask your lawyer for a detailed description of the services provided to you and the amount charged for each activity.
For further clarity, if your lawyer bills on an hourly basis, it's not good enough for the bill to say "15 hours at $200/hour." The bill should detail, hour by hour, what the lawyer did. Many lawyers bill in six-minute increments, so your bill may be very specific.
Just like when you get a bill at a restaurant or your credit card statement, it's always good to review it.
Talk to Your Lawyer
When you still feel your bill is unfair after getting a detailed accounting of your lawyer's services and reviewing your fee agreement, discuss it directly with your lawyer. In discussing your confusion or frustration, your lawyer may realize there was a mistake in the billing, such as:
- Miscommunication as to how the billing would be done
- Double-billing for the same services
- Billing for time spent on errors made by the lawyer (which you shouldn't have to pay for)
The worst that can come from a talk with your lawyer is that you'll better understand how your lawyer arrived at the final billing total.
Disputing the Bill
While you can hopefully say that paying a lawyer to get through a legal issue is worth it, you might still feel the bill is way out of proportion to the work that was done for you. You can dispute your bill, but it may be more trouble and cost more than paying the bill itself.
Before taking a fee dispute to court, explore the possibilities of mediation and/or arbitration through your local bar association. These programs allow you to resolve the dispute faster and more efficiently than through a lawsuit. And it's often cheaper and less stressful than going to court.
Many bar associations have lawyer-fee mediation programs with a neutral third party called a mediator. The mediator doesn't decide how much the fee should be, but can help you and your lawyer negotiate an agreement everyone can live with. A mediator will usually meet with both parties separately and then together as appropriate.
If you reach an agreement through mediation, the mediator will put the agreement in writing and both parties sign it. If mediation isn't successful, you can try arbitration as a next step.
Many bar associations also offer fee dispute arbitration programs. You and your lawyer must agree in writing to be bound by the decision of an arbitrator. An arbitrator is a neutral third party who hears all the evidence from you and others, reads over any relevant documents and reaches a written decision on what the fee should be.
Much like other bills, you must pay your bill at some point. If you don't, your lawyer could sue you and you'll be forced to defend your position in court. Be prepared to support your position with witnesses, correspondence from your lawyer and any other documents you think may help your case.
Reporting Your Lawyer for Unethical Behavior
If you suspect that your lawyer has stolen money from you, such as pocketing money due to you from a settlement or court judgment, or other illegal activity, you must report the incident to your state bar association or disciplinary commission. Almost all state bar associations have client-victim compensation funds set aside to reimburse clients whose lawyers illegally took money from them.
Questions for Your Attorney
- How much does it usually cost to resolve a case like mine? What issues caused the legal fees to be higher or lower in my case?
- Could you outline a budget that shows the legal fees and costs I can expect to incur in my case over the next six months?
- Can you explain the charges for the correspondence and legal research done for my case? How did that benefit my case?