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Three Main Kinds of Fees Charged by Lawyers

View the main fee types below:

Contingency Fees

One way lawyers or attorneys charge fees is through what is called a "Contingency Fee". A "contingency fee" means that the lawyer gets a percentage of the money he or she recovers for the client. The fee is "contingent" upon the lawyer winning money for the client. If the client gets nothing, neither does the lawyer. "No Fee Unless You Win," and "No Cure, No Fee'" are two other ways of saying this.

Almost all personal injury cases and many claims against insurance companies are handled on a contingency fee basis. There is, however, no legal requirement that personal injury cases be handled on a contingency fee basis. But, accident victims usually suffer financial loss and are not able to pay hourly fees as the lawyers works on the case. More importantly, when an attorney takes a contingency fee case the client can feel assured that the lawyer has confidence in the case. (Note: It is not only important that the lawyer has confidence in the case at the beginning. It is also important that the lawyer's confidence is based on a realistic appraisal of the case and that the lawyer is prepared to see the case through to completion, including litigation, if necessary. This is where the lawyer's reputation and reviews from prior clients is important.) In contrast, when the lawyer takes a case on an hourly fee, the lawyer is going to get paid regardless of results so the client has to depend on the lawyer's honesty and legal judgment when the client decides if it would be worthwhile to pursue a case on an hourly basis.

In a contingency fee arrangement the lawyer usually pays for costs of litigation which are then charged back to the client when the case is settled or a judgment paid. The biggest cost items for cases that are either tried or prepared for trial are expert witness fees. If the case is tried it is usually necessary to pay a doctor a large fee to come to court and testify about the client's injuries. In a medical malpractice case it will be necessary to hire a doctor in the same specialty as the doctor being sued to testify why the doctor being sued violated the standard of care. In a products liability case an expert will have to be hired in most cases to explain why the product is defective.

If the case is not tried, but suit is filed and the case is prepared for trial, costs will include the filing fee and often smaller payments to expert witnesses for written opinions. There may also be fees for depositions of expected trial witnesses. (Depositions are proceedings in a lawyer's office in which the expected witness is placed under oath and asked questions by attorney. A court reporter takes down the questions and answers.)

For certain car and truck accident cases in which there is a favorable police report we compete on price and offer a low discount 25% Contingency Fee in contrast to most other law firms which charge 1/3 to 40%. However, in other personal injury cases, or car accident cases without a favorable police report, we charge the more standard 1/3 to 40%. We charge 40% for legal malpractice cases. See Low Fee for Favorable Police Report Cases

Note: There are some types of cases in which lawyers are not allowed to charge a contingency fee. These include divorce and criminal defense cases. However, contingency fees may be allowed in regards to petitions to MODIFY spousal and/or child support payments.

Broadly speaking, there are also two types of contingency fee. The contingency fee we use is a flat percentage rate or flat contingency fee regardless of whether the case settles without filing suit or goes to trial. But some lawyers use an escalating contingency fee. For example, the fee might be 33.33% if settled w/o filing suit and 40% if it is necessary to file suit and 45% if it is tried and 50% if there is an appeal.

Another very important issue in personal contingency fees is what the lawyer takes the fee on and what the lawyer doesn't charge for. For example, at Reed & Mansfield we almost always get our clients some kind of discount on their medical bills, but we never take a fee for negotiating these discounts. Some law firms do. At Reed & Mansfield we never charge a fee for the property damage part of a personal injury claim and tell the insurance company to leave our name off of the check they write to our client for property damage to the car.

How is the Contingency Fee Calculated?

Typically, the contingency fee is calculated on the total settlement or verdict. For example, a 25% on a $100,000 case would be $25,000. Of the remaining $75,000, some money might go to pay back costs and medical liens. To give an example from a recent case we handled, of a $1,900,000 settlement, $475,000 was the 25% fee, $30,007 was repaid to us for costs, $61,667 was paid to lien holders and the rest went to the client. Most of the costs in this case were for high-priced experts to give us reports on such things as: 1) From an orthopedic surgeon: How would the client's injuries affect him over his life?, 2) From a vocational expert: How would the client's injuries affect his earning capacity for the rest of his life?, and 3) From an expert on care costs, How much would future care cost, and 4) From an economist: How should future care costs be adjusted for things such as future inflation? In this case we paid an orthopedic surgeon over $9,000 to examine the client and offer his opinion as to how much bone damage was permanent.

Almost always big cases such as the one above require that suit be filed and prepared for trial even if they settle. It's just too hard to get a decision maker at an insurance company to agree to big payout unless they are convinced that the Plaintiff's lawyer has spent the time and money to prep the case well for trial. Smaller cases, from the low six figures and down, especially motor vehicle accident cases, usually settle without filing suit and in such cases the costs are often trivial, sometimes just a few bucks for medical records.

A controversial area with contingency fee is this: What happens if the costs and medical liens are so large that they really eat into the Plaintiff's recovery? Some cases are "poisoned" at the outset by large medical liens. For example, in a car accident case if there is only $15,000 in insurance available and the adverse driver has no assets and there is a hospital lien for $60,000 and the victim has no health insurance we are just going to tell the prospective client at the outset that we see no way to put any dollars in their pocket. We are not going to take the case just so we can pocket a fee. However, what if there is $100,000 in insurance available and the most we can get the liens down to are $60,000? In that case rather than take a 25% fee of $25,000 and leave the client with only $15,000 we would reduce our fee so that we would split the remaining $40,000, fifty-fifty with the client, thereby taking a $20,000 fee. Personal injury clients should ask attorneys what they would do in such a situation before signing a retainer agreement.

Is it Legal to Send a Non-Lawyer to Sign-up the Client?

If the client is in the hospital following an injury and calls the lawyer's office about possible representation, many personal injury attorneys send a non-lawyer to the hospital to sign up the client. According to the Nevada State Bar signing up a client is lawyer work that cannot be delegate to non-lawyers. A contract initiated between a client and a non-lawyer employee of the lawyer may not be valid. But why hire a lawyer who can't be bothered to meet you in person?

If you have just signed a contract with a law firm and never spoke to a lawyer when signing up, the contract can be cancelled if you want to do so. However, if the firm has done a lot of work on your case already, it may be a different story.

Hourly Fees

A second type of fee is the straight hourly rate, usually with a retainer to cover several hours paid up front. This kind of fee is usually charged for business, contract, and all matters where the client is the defendant in a civil case. Criminal defense is usually done either on an hourly rate or a flat fee. The hourly rate charged by our firm, like many other firms, depends on the complexity of the work and which specific lawyer handles it. Another complication with an hourly rate is whether there will also be hourly charges by paralegals or by more than one attorney. Although our firm tries to avoid hourly fees if there is another reasonable alternative, there are lawyers we compete with and admire who charge an hourly fee, are great, and bill fairly and reasonably. Although unusual, occasionally affluent clients who can pay a monthly bill will contract with personal injury attorneys to work on an hourly fee.

We don't like hourly fees because the time it takes to get a job done can often vary greatly due to factors beyond the control of the lawyer and client. If the work gets done faster than usual on a hourly fee the lawyer is a great guy. If the work gets done slower than usual on an hourly fee the lawyer is a dishonest bum. With a flat fee or contingent fee, the client knows upfront what the fee will be and if takes longer than usual that's the lawyer's problem and if goes faster than usual, that's to the lawyer's benefit.

In a worst case scenario hourly fees reward inexperience and incompetence.

Flat Fees

The third type of fee is a flat fee. In our uncontested probate cases we offer a flat rate and seek to compete for your business as the high quality, low cost probate lawyers in Las Vegas, Nevada. See our legal fees listed at probatenevada.net/Pages/Probate.aspx

In uncontested probate cases we seek to be more than affordable probate lawyers in Las Vegas and through out Nevada; we believe we are the high quality low cost probate lawyers in Nevada. In uncontested probate cases there are economies of scale which we can pass on to you. While probate cases involve a lot of details, there is not a lot of room for creativity in uncontested probate cases, nor any advantage in being super-aggressive. (However, in personal injury cases where the recovery often is all about creativity and aggressiveness we do not try to compete on price, except for certain favorable police report car and truck accidents as mentioned above.)

Whether the attorney charges a flat fee or an hourly fee, the attorney will usually charge a retainer fee, which is upfront money to help insure that the lawyer gets paid all or part of the fee. Retainer fees are divided into regular or refundable versus non-refundable retainer fees. The advantage to the lawyer of a non-refundable retainer is that s/he may pocket it upon receipt. The regular or non-refundable retainer fee must be put in the lawyer's trust account and can only be taken out and pocketed by the attorney, either all at once, or in parts when it is earned. Naturally, the client would prefer the retainer fee to be a regular retainer fee.

Many clients are afraid that lawyers who charge by the hour will take advantage of them. This is an additional reason we try to offer flat rates for uncontested probates and many other matters.

The State Bar has a fee dispute committee that will hear without charge a client's complaint that an attorney charged an unreasonable fee. Usually the committee will find a fee okay if the client and lawyer agreed to the fee in advance and the lawyer did the work agreed upon. Many complaints to the fee dispute committee are that the lawyer collected an upfront fee and then failed to do the work. See Attorney v. Client Fee Disputes

We believe we are very affordable and low cost in many areas. We believe that clients and lawyers should have a clear understanding of fees. Don't be shy about asking us what our fee will be and what it will include. The best way to avoid misunderstandings is to discuss fees up front. In many areas we believe we are the low cost provider of quality legal services and welcome fee inquiries. Be suspicious of any lawyer who doesn't want to discuss fees in detail.

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The Law Firm of Reed & Mansfield, Attorneys  Personal Injury & Property Damage, Las Vegas, NV