When you need to hire a lawyer, you’ve probably seen better days.
Just the thought of hiring a lawyer sparks stress in most people. Fancy offices, suits, courtrooms, and legal jargon make it seem like hiring a skilled lawyer is a luxury. While this may be the case in some situations, others do not require extravagant out-of-pocket fees.
But how much do lawyers cost, exactly?
We’d love to give you a straight answer to this question, but the truth is it depends.
The legal field is extremely vast and varied. Different types of lawyers command different pricing structures. In this post, we want to explain a few of the most common attorney fees you’ll come across when hiring a lawyer. Let’s get going.
Contingency Fee Agreement
Contingency fees are typically the most client-friendly – and least intimidating. Under a contingency fee agreement, there is no out-of-pocket cost to hire a lawyer. Instead of collecting an hourly or task-based rate, the lawyer makes a percentage of the total payout AFTER they win the case, and won’t demand a penny upfront.
Personal injury, bankruptcy, malpractice, and lemon law are a few areas in which attorneys usually work on contingency agreements.
Personal injury is the most prevalent in these areas. People who have suffered personal injuries are extremely vulnerable. Most are overwhelmed with medical bills, property damage, lost wages, and a host of other financial hardships. Trustworthy personal injury lawyers are compassionate in helping clients take the legal troubles off their worry list so they can focus on recovery, rather than the cost to hire a lawyer.
Contingency fee agreements are great for a couple of reasons. For one, attorneys who work on these terms are motivated to navigate the legal process as quickly as possible – as they do not get paid until the case is over. Most importantly, it’s in the best interest of the attorney to negotiate the highest settlement possible. Law firms that operate on this level will not leave a penny on the table.
How much does a lawyer cost if the case gets complicated?
Cases that involve a contingency agreement are rarely straightforward – and the attorneys know it. In personal injury cases, there are many, many moving parts in a claim. This includes (but is not limited to):
- Medical analysis
- Police reports
- Scene of the incident
- Background of the at-fault party
- Witness statements
- Property damage
- Insurance policies
Your personal injury attorney will need to gather all of this information and examine the details under a microscope to build the case. Anything can happen in a personal injury claim. This is all included in the contingency fee agreement.
The biggest obstacle in personal injury cases is negotiating with insurance companies. These companies have no intention of paying out a fair settlement – and will fight tooth and nail to minimize their liability. Skilled attorneys understand this and are prepared to go to war.
But what happens if you lose the case?
If you lose the case, you WILL NOT be on the hook for the cost to hire a lawyer. A contingency fee agreement is dependent on winning a settlement. That’s why you commonly see these attorneys advertise “no fees until we win!”
Reputable attorneys who work on a contingency fee agreement do not take cases lightly. They will not take one unless they are confident they can win. Losing a case – or getting a low-ball settlement means they wasted months of hard work, do not get paid sufficiently, and compromise the reputation of the firm.
How Much Does It Cost to Hire a Lawyer on a Contingency Fee?
Contingency fees can vary based on the firm, case, and several other factors. To reiterate, these attorneys take a percentage of the total settlement paid out by the other party. This percentage can be anywhere from 25-40 percent. Attorneys on the higher end will likely take a bigger percentage. For instance, we normally charge between 33 and 40 percent as our contingency fee agreement.
When first thinking about how much a lawyer costs, you might assume that all attorneys work on an (expensive) hourly basis. This depends on the type of lawyer you need. Criminal defense and divorce attorneys commonly bill on an hourly basis – and may require an upfront deposit to take the case. Some personal injury attorneys charge an hourly rate for a specific task.
The hourly rate structure can be beneficial for shorter tasks – like reviewing policies, examining evidence, representing you during the trial, and so on.
There are several downsides to the lawyer cost per hour pricing model. The biggest is simply the unknown. An attorney can estimate the number of hours a task will take, but it may take much longer when they get down to business.
Second, the number of hours will go up if the case drags on. If a case goes to trial, you’re looking at a much bigger hourly commitment. Third, the attorney is not financially motivated to work quickly – as they make more money the longer tasks take.
Be sure all the terms of this agreement are outlined in the contract. This should include which services count towards the hourly fees – contract reviews, communication, investigations, courtroom representations, etc.
How Much Do Lawyers Cost Per Hour?
The average cost of lawyers per hour is usually between $100 to $300 per hour. More reputable firms with highly-specialized attorneys may charge upward of $1,000 per hour. The attorney should break down the hourly investment for each task with documentation.
In personal injury law, we generally recommend steering clear of attorneys who operate on an hourly basis. This pricing model can easily add stress to an already-stressful recovery process.
Flat Fee (Task-Based)
Task-based pricing structures for hiring a lawyer are usually for jobs with shorter, more predictable turnarounds. For example, if you need an attorney to write up a contract, review a contract, or fight a ticket, the attorney might charge a flat rate based on the task. This is because they know roughly how long these tasks take – and there aren’t many variables that can complicate the process.
Now, paying a flat rate to hire a lawyer doesn’t necessarily mean there won’t be more costs. For example, say you need a terms and conditions sheet written for your startup company. As the attorney is writing up the contract, you may discover your business is more complex than you originally thought – and there are additional factors that need to be covered. Or, a seemingly civil, no-contest divorce can quickly get messy.
Take your time to carefully read over the contract and don’t be shy with questions if you’re unsure of something. You need to understand exactly which tasks are included in the pricing, and how much additional ones would cost.
It’s pretty rare for a personal injury attorney to solely work on a task-based model. Unless you just need a standalone task in an injury case (which is also rare), we’d recommend avoiding this pricing structure.
Hiring a lawyer on retainer means you pay upfront costs for future legal services. Business lawyers commonly work on retainers, as they know their services will be needed at one point or another. Say an attorney charges $200/hour. They may charge a $1,000 retainer to a business for five hours of work. Additional hours will be billed on top of that retainer cost.
Unused hours in the retainer may be returned to the client after the case is over.
What’s the Cost of NOT Hiring an Attorney?
Choosing to represent yourself (without an attorney) is an extremely risky move. In personal injury cases, this route will almost certainly lead to getting short-changed or worse.
To echo a previous point, negotiating a settlement with insurance companies is the most challenging part of the process. These companies – even your own insurance provider – have no intention of paying out a fair settlement. They have all sorts of tactics to minimize the payout It takes a professional to negotiate for reasonable compensation. Trying to negotiate for damages without hiring a lawyer will be nearly impossible.
Choosing to manage the personal injury process can easily result in:
- A significantly smaller settlement.
- The case dragging on unnecessarily
- Critical details getting missed, reducing the payout.
- You end up responsible for all medical bills, lost wages, and all other damages.
- An immeasurable amount of added stress, on top of your recovery.
Plain and simple, making the decision not to hire a lawyer can have lifelong consequences. Even if you think your case is a slam dunk, there are many, many unforeseeable hiccups in the legal process. Hiring an attorney can (and likely will) save your sanity throughout a personal injury case.
Over to You
There’s no denying that hiring a lawyer is stressful. Simply talking about pricing and the long road ahead is enough to intimidate anyone. But the good news is it’s one of the best investments you can make.
Even better, you don’t have to make the decision blindly.
Most attorneys – especially personal injury attorneys – have no problem answering questions for you. A trustworthy personal injury lawyer will understand you’re in a tough spot, and will happily steer you in the right direction.
For any questions or concerns about personal injury law or the pricing structure involved, don’t hesitate to reach out to Midwest Injury Lawyers. Even if you don’t have a claim, we’re here to clear up your concerns and help you navigate the process with minimal stress.