You Couldn't Pay Me Enough

Q: Is a lawyer’s fee limited to a percentage of the ultimate resolution he achieves for his client, or is it limited just to the hours that he actually works on the case?

A: This is kind of like asking if an orthodontist is paid just for the hardware he puts in your mouth, or the skill and expertise required to make sure your teeth are straight. In other words, lawyers – like every other professional – is in business to make a living. To support themselves, attorneys need to make money.

Sure, there is a certain satisfaction to doing one’s work. There is fulfillment in winning a case or settling a dispute out of court. Some attorneys even find excitement just in the arguing. Other lawyers would rather work for no money and crusade against injustice. But, I would venture to guess that most attorneys are attorneys because (a) they like most of the work they do and (b) it pays the bills.

Lawyers are usually paid in a couple of different ways. The “contingency fee arrangement” suggests that the attorney will take the client’s case and front all the expenses until the case is resolved. In exchange for this, the client agrees to reimburse the attorney out of the settlement, if any, that the he is able to negotiate for the client. That is, the client reimburses those actual costs (e.g., filing fees, postage, travel, overhead, etc.) that the attorney fronted, plus a percentage (traditionally, one-third of the total settlement).

If a contingency is impractical or undesirable, an attorney may agree to be paid based upon the hours he actually works. In such a situation, an attorney becomes an hourly worker, though he is hardly making minimum wage. Most attorneys in private practice today are able to charge between $100 and $300 per hour that they work. Thus, if an attorney billing at an hourly rate works one hour for a client, he will make $100. If that same attorney does some work for a client, but it only takes one-half of an hour, then the attorney only makes $50 for that effort. Once the attorney concludes his representation, the attorney will then bill the client for the total hours he worked on the case.

Interestingly, these two most widely used types of fees are most often used by opposite sides of the bar. Attorneys that usually represent plaintiffs will more often utilize a contingency fee arrangement. Working in that relationship, the attorney does not get paid unless he achieves a resolution for the client. The benefit here is that the attorney will, in theory, work harder, since his paycheck is in direct proportion to the client’s.

On the other hand, defense attorneys usually bill by the hour. Hourly arrangements promote more work for defense attorneys who are working to avoid having their client pay anything (other than the attorney’s bill) in a lawsuit. Billing by the hour encourages the defense attorney to be very thorough in his work.

Of course the natural reaction to all of this is to suggest that attorneys are greedy and make too much money. However, I urge you to look at what you get for your money. Attorneys solve tremendously complex issues and are, in some regards, why we have put to rest the notion of settling disputes with pistols at ten paces.

Plus, attorney fees are quite reasonable, if you really think about it. After all, when was the last time your orthodontist, dentist, or doctor offered to forgo payment unless you got paid for wearing braces, filling a cavity, or drawing blood?


Copyright: Jeremiah G. Dys, Esq. May not be used absent express, written permission. Please contact the author for permission to reprint.