Legal Fees

Almost everything individuals do — such as making a purchase, starting a business, driving a car, getting married or writing a will — is affected by laws.

This pamphlet discusses legal fees and expenses. For information relating to deciding when you need a lawyer, and how to select one, see the WSBA pamphlet titled Consulting a Lawyer.

It is appropriate — and important — to discuss fees when you first visit a lawyer. You have a right to know how you will be charged, how much the case is likely to cost, and when you have to pay.

Various factors and arrangements may influence the costs of legal services. Your lawyer can explain how fees are computed and may outline options available to you. The lawyer can sometimes provide a reasonable estimate of the time and costs involved in serving your particular needs.

Your lawyer will want you to be satisfied not only with the service provided, but also with the fee you are charged. Candid discussions about fees and your ability to pay will avoid misunderstandings, while helping you decide if you want to retain the lawyer.

Determining Reasonable Fees

The rules that regulate the ethical conduct of lawyers state that all fees must be "reasonable." Along with fair and competitive fees, lawyers strive to provide service at rates commensurate with the skill required and the results obtained.

Three common methods of determining fees are time (usually based on hourly rates), contingency (based on the outcome of the case), and flat fees (for specific action, such as handling a real-estate closing). These typical fee arrangements are explained in the following section.

Although exact fees cannot usually be determined in advance, the factors involved in computing charges are fairly standard. These factors include:

The time spent on a particular problem. Time is a basic element in determining professional fees. For many matters, a straight-time hourly fee agreement will be arranged. Different lawyers value their time at different rates because of variations in experience, training, skills and law-office expenses. Most lawyers keep accurate records of time spent on each matter. Assistance from other lawyers, legal aids and clerical staff also affect costs.
The amount charged in a locality for similar legal services. Lawyers usually bill for consultation and meetings, telephone calls, document preparation, client representation in court, research of legal issues, and for other work that directly relates to a case. These charges should be itemized or explained to you. Legal services, unlike medical or dental services, are often performed when the client is not present. Documents and advice are frequently the products of many hours of analysis, research and preparation.
Ability, experience and reputation. You should expect to pay more for a lawyer with proven abilities whose expertise in a specific area of law is in demand. Circumstances or unique problems sometimes require special services. A lawyer with a reputation as an "expert" or who concentrates his or her practice in a particular area of law may charge higher fees than someone less experienced. This lawyer may sometimes be able to handle matters in substantially less time, resulting in a lower total fee.
Overhead and operating expenses. When hiring a lawyer, you hire the resources of a law office to work on your behalf. For a typical law office, overhead and operating costs (including such items as rent and utilities, professional and support staff, law libraries, equipment and supplies, taxes and insurance) may comprise 35 to 60 percent (or more) of legal fees.
The results obtained. In some cases, the outcome and the amount involved may determine a fee. A "contingent fee" agreement, often used in personal injury or collection cases, is one example. (See following Fee Arrangements below.) No lawyer can guarantee results of a court proceeding. If a contingent fee has not been arranged, the lawyer will expect to be paid whether the client wins or loses the case.
Time limitations imposed by the client or by the circumstance of the matter.
The seriousness and complexity of the legal problem. If the problem involves established legal principles requiring routine skills and attention, a straight-time fee may be appropriate. However, if the problem raises difficult or novel questions of law, larger fees may apply.
A client's ability to pay. Payment plans can sometimes be arranged, or legal aid might be available. Discuss these concerns before you hire an attorney.
Other factors. The attorney-client relationship must also be considered. With a continuing relationship, the charge for a particular matter may be less than if employment is on a one-case basis.

A client should also realize the employment for his case may preclude a lawyer and the associates from accepting other representation which conflicts with the client's interest.

Fee Arrangements

In addition to straight-time fees, other arrangements include contingent fees, negotiated percentages, flat fees, hourly charges, costs and expenses, fees set by a judge, or retainers.

With a contingent fee arrangement, the lawyer receives no fee unless money is recovered for the client. Upon recovery, the lawyer is paid an agreed-upon percentage, usually ranging from an amount equal to 25 to 50 percent of the amount recovered. A written fee agreement should specify the costs and expenses to be deducted and whether such costs and expenses are to be deducted before or after the contingent fee is calculated.

In Washington, a contingent fee arrangement is not permitted for criminal cases nor for domestic relations matters.

Even if there is no recovery, however, the client is still responsible for court costs (filing fees, subpoena fees, etc.) and related expenses, such as telephone toll charges, investigators' fees, medical reports, and other costs.

Negotiated percentages are sometimes used when collecting debts. The fee is based on a percentage of the amount claimed or collected.

Flat fees are common for routine services, such as drafting an uncomplicated will or assisting with a simple real estate transaction.

Hourly charges are based on the time spent in handling a matter. Rates vary depending on a lawyer's experience or the demand for a particular service.

Most costs and expenses are charged at periodic intervals, regardless of the fee arrangement. Filing fees, expert testimony, fees for serving legal summons, and other costs that are advanced by the attorney on behalf of the client are billed separately. Expenses such as long-distance telephone charges, photocopies, etc., are also billed.

In some cases, a judge or hearing officer may establish a fee, considering the work and complexities involved in a particular situation. Lawyers' fees for probate services are often subject to court approval.

Paying a Consultation Fee

Policy and practices vary. Don't hesitate to ask about the initial consultation fee when calling for an appointment with a lawyer. Some lawyers have a policy of "no charge for the initial consultation," while others charge for a client's first visit.

If, after an initial visit, you decide not to take further action, you are under no obligation to proceed, but you will be expected to pay for the initial visit unless you are advised or promised otherwise.

Getting a Written Agreement

A clear understanding of fees is important to the attorney-client relationship. No matter which fee arrangement you agree to, you should ask for a written agreement. An agreement in writing is required for any contingent fee arrangement.

As with any contract, you should read the agreement carefully, understand it before signing, and all parties should keep a copy of it.

Responsibility for Paying Fees

As the client, you are responsible for paying legal fees and expenses.

In some court cases, a judge may award a partial or full fee to be paid by an opposing party. Such judgments do not release you from the obligation to pay your lawyer, nor do they guarantee payment from the other party. Some judgments are not collectible; other judgments may cover only part of the fees you actually incurred.

Paying Fees

In many cases, a lawyer will require a deposit before agreeing to handle your matter. Such payment can assure the lawyer's availability and may be applied to initial work and expenses. (Lawyers must follow strict regulations for the safekeeping and accounting of these deposits and all client funds.)

Depending on the circumstances, an initial payment may be considered a "retainer," "advance," "down payment" or "deposit." Clients in need of continuing legal services (usually businesses) sometimes pay monthly or annual retainers.

Fee arrangements vary depending on type of service, personal preferences, and lawyer practices and policies, so be sure you understand your options and obligations when your case is first discussed.

Questioning a Bill

If you have questions about a bill, contact your lawyer and discuss it. Most lawyers maintain detailed records of time spent and expenses associated with each case and can itemize or thoroughly explain any charges you think are confusing or improper.

In a tort action (civil suit for a wrongful non-contractual act), a client may promptly petition the court for a determination of the reasonableness of the fee. In actions for injuries resulting from health care, the court must determine the reasonableness of the fee.

Fee disputes can also be resolved by litigation, by negotiation, or by WSBA's voluntary Fee Arbitration Board. The procedures are explained in a pamphlet available from the WSBA.

Reducing Legal Expenses

Lawyers are professionals with many qualifications and years of training. Time and advice are their stock in trade, so they must charge for them. By following a few suggestions, however, you can help reduce legal costs.

Gather pertinent information before meeting with your lawyer. Write down names, addresses and telephone numbers of all persons involved in the matter.
Be organized. Bring letters, documents and other relevant papers to the first meeting with your lawyer. Summarize essential facts. Write down questions you want the lawyer to answer.
Be concise in all interviews with your lawyer.
Answer questions fully and honestly. Be accurate and objective. Reveal all information, even if it may not be in your favor, and avoid letting emotions color the facts.
Avoid unnecessary telephone calls to your lawyer.
Be informed and keep your lawyer informed. Discuss ways you can help, such as by obtaining documents, lining up witnesses, or providing other assistance to reduce costs.
Consider "bottom line" or financial aspects of a legal matter and discuss them with your lawyer: Be sure you understand advantages and disadvantages of a proposed action (for example, would court costs and legal fees be more than the amount of a bad debt you would likely recover?).
Try to prevent later problems by contacting a lawyer before committing yourself to a major obligation.

This pamphlet was prepared as a public service by the Washington State Bar Association. It contains general information and is not intended to apply to any specific situation. If you need legal advice or have questions about the application of the law in a particular matter, you should consult a lawyer.