Law and Economics 101: How to Pay for your Legal Bills

By: Janice Dantes

 

Being an attorney is like any other job: I perform a service and receive payment for that service. While most of my clients are appreciative of the service, no one is happy paying their bills. I do not know a single lawyer or business owner who was able to collect 100% of the work they provided. Could you imagine working 80 hours and not receiving a paycheck? Below are some basic information about legal bills.

1. Retainer and Hourly Billing. Mostly lawyers who charge an hourly rate as for a retainer to do their work. Retainers usually begin at around $2,500 and go up from there. So why do lawyers charge a retainer? It is because clients will never pay their bills if we don’t ask for this up front (I know, because it has happened to me). Divorce cases are typical cases that are billed hourly. On average, a divorce costs $5,000. I can count on one hand how many uncontested divorces I have had in my career. You are divorcing for a reason and usually that involves hurt feelings. I have had divorces that were so nasty that they ended up in trial. Do not be surprised if your lawyer asks for a $10,000 trial retainer. If you want to minimize what you pay your lawyer, that means you will have to do much of the work yourself and get along with the other side to try to work it out yourself. In most lawsuits, you are getting a lawyer because you could not work it out yourself. Please pay your bills and don’t take the service if you cannot pay.

2. Contingency Fee. Some cases are contingency fee. This is most common in personal injury cases (e.g. car accidents, dog bites, medical malpractice or any other case where an insurance company is involved) or worker’s compensation (meaning you were hurt at work and pay into worker’s compensation insurance). A typical contingency case begins with retaining a lawyer and signing a contract that at the end, all costs are paid from any settlement or award and your lawyer will take his/her fee before disbursing your share. Lawyers typically ask for 1/3 of what they are able collect on your behalf and reimburse themselves for their costs.

3. Flat fee. Some legal services are just a flat fee. This includes most typical real estate closings. While some attorneys offer flat fee services, this is not typical. Do not expect that your divorce or case will be flat fee.

4. Legal Insurance. Some employers/unions provide legal insurance to their employees/members. If you are getting divorced, buying a house, or just getting sued, check with your employer if they provide legal insurance. My firm takes legal insurance from ARAG and APWU (American Postal Workers Union).

5. Borrowing Money and Financing. If you do not have the money for legal services but really want the services, borrow the money from friends and family. If you do not have anyone willing to loan you money, then you will have to take out a loan. My firm works with FlexxBuy in order to provide financing options and payment plans for clients.

6. Pro Bono. Pro bono means getting a lawyer for free. Pro bono services are only available to the neediest of clients for specific kinds of cases. Just because you don’t want to pay for legal services does not mean you qualify for pro bono services. Also, you are still responsible for any costs. If you have to pay for a private server or schedule a deposition, this is on your own dime. Pro bono cases take a longer amount of time because most lawyers prioritize their paying clients. If you are a pro bono client, please be patient and do not bother your lawyer too much. We have a right to withdraw from any case and if we find that you are taking too much of our time, we can quit.

I find it morally reprehensible to rip people off. Fortunately, I have found our Filipino community to be very honest and understand the value of a lawyer.

If you have any questions about financing your case, please contact me at (312) 546-5077 or janice@pinaylaw.com.

Thank you for reading. Until we meet again, love one another.