Types of Attorneys’ Fees
There are several distinct types of legal fees. As stated above, a client must realize when considering a lawyer’s fee that many factors, such as time, ability and experience, may determine an attorney’s fee.
Fixed fees or flat fees
For frequently performed services such as drafting an uncomplicated will or assisting with an uncomplicated real estate transaction, many lawyers may charge a fixed fee that can be readily quoted to you. The lawyer’s fee may be set to average out all costs for such uncomplicated services handled by the attorney. Flat fees are also often charged in immigration and criminal law cases.
Hourly charge
Many lawyers establish a fixed hourly charge for their services. The lawyer’s fee is computed by multiplying the fixed hourly charge by the number of hours the lawyer spends working for the client. The final fee may still include other direct out-of-pocket expenses, such as court filing costs, photocopying charges, long-distance telephone charges, travel costs or other expenses directly related to a particular case.
When retaining a lawyer on an hourly basis, you may wish to ask for an estimate of the costs for the requested service. Also, you should understand what complications might arise in your case and the effect they will have on your fee. Hourly rates of lawyers will vary depending on a lawyer’s experience and involvement in a particular area of the law. No set hourly rate for lawyers or services exists. Rates do vary among lawyers.
Contingent fees
In certain types of lawsuits — such as personal injury, collections and auto damages — the lawyer who represents the person suing may agree to accept a part of the money the client recovers as the fee for services. This is called a contingent fee. Under the lawyer’s ethics rules, the lawyer and client must enter into a written fee agreement at the outset of the representation, stating what portion of the recovery the lawyer will receive. The fee is generally fixed at a percentage of the recovery. An additional percentage may be added if the matter is tried again or appealed to a higher court.
In a contingency fee contract, you and your lawyer agree that the lawyer will not get paid any fees unless you win your case. However, you may be charged for costs such as court filing fees or expenses paid to witnesses. If you win, these expenses may be deducted from your share of the recovery. You will have to pay these costs, even if you lose your case, unless your contract specifically says that you do not owe the costs if you lose.
The contingency fee contract must be in writing and signed by the client and any lawyer or law firm who will be paid under the contract. The contract must state what percentage of the recovery the lawyer may keep, other expenses that will be deducted from the recovery and how these expenses will be deducted.
How much the attorney will be able to keep as a contingency fee (remember, this does not include costs) will depend on what stage of the case you are in and how much is recovered.
The following limitations are contained in the Rules of Professional Conduct and apply only in cases involving personal injury or property damage that occurred as a result of tortious conduct such as auto accident or products liability cases. These limits also apply in medical malpractice cases if you have agreed to waive your right to the amount of a recovery provided for in the Florida Constitution. You and your attorney may agree to a lesser percentage than those listed below. However, if you and your lawyer want the fee to be greater, you must go to court before your case is filed or at the same time your complaint is filed to get the percentages increased. Lawyers who charge more than the amounts below are presumed to be charging an excessive fee unless they have prior court approval to do so.
- 33 1/3 percent of any recovery up to $1 million if you and your lawyer settle your case before the filing of an answer or demand for appointment of arbitrators or if you settle before the time for filing the answer or demanding appointment of arbitrators expires,
- 40 percent of any recovery up to $1 million if you settle or win your case at any point after the filing of an answer or demand for appointment of arbitrators or after the time expires for filing and answer or demanding arbitration through the entry of judgment.
- In addition to the above fee, your lawyer may charge up to 30 percent of any additional recovery between $1 million and $2 million either by settlement or trial verdict.
- In addition to the above fees, your lawyer may charge up to 20 percent of any additional recovery above $2 million either by settlement or trial verdict.
- At times, the person you are suing may admit that they are liable but may disagree with you on the amount of damages that they owe you. If all of the defendants admit liability when they file their answers and only want a trial on the question of damages, the lawyer may charge up to 33 1/3 percent of any recovery up to $1 million, 20 percent of any recovery between $1 and $2 million, and 15 percent of any recovery over $2 million.
- If after the trial or settlement your case is appealed or your attorney has to seek post-judgment relief or file an action to help you collect your judgment, an additional 5 percent of the recovery may be added to the fee.
- In addition to fees, you may be responsible for paying costs and expenses if this is what your agreement requires. These will have to be paid even if you lose your case and your lawyer does not collect a fee. At the end of your case, your lawyer must give you a written statement of the outcome of the case. If there is a recovery, the lawyer must give you a written statement of the amount recovered and how it is calculated, plus an itemized bill showing all of the costs and expenses. This statement must be signed by you and the lawyer(s) who represented you. If you have any question on any of the charges, ask your lawyer.
Medical malpractice cases
Article I, Section 26 of the Florida Constitution limits the amount of the contingent fee that a lawyer may charge in a medical malpractice case. The constitution provides that a client is entitled to no less than 70 percent of the first $250,000 in damages excluding costs, and 90 percent of all damages over $250,000, excluding costs. However, lawyers who represent clients in medical malpractice cases may charge a fee that is more than the constitution’s fee limit with your consent, which must be signed by you and notarized.
The Rules of Professional Conduct require that a lawyer who charges a contingent fee in a medical liability case provide you a copy of the constitution’s fee limitations.
The lawyer is also required to tell you that these limits apply unless you waive the constitutional limitation on the fee. The lawyer must also advise you that you may consult with another lawyer before signing a waiver and that you may ask for a hearing before a judge to explain the waiver.
If you choose to waive your right to receive the percentage of the recovery that is provided by the constitution, the lawyer must provide you with a detailed waiver form.
By signing this form, you agree to an increased fee and waive your right to the fee limit set forth in the constitution. The amount of the fee will be limited by the Rules of Professional Conduct instead of the Florida Constitution.
The waiver also states that:
- You understand that signing the waiver releases an important constitutional right.
- You were advised that you could speak to a separate and independent lawyer before you signed.
- You may ask to have a hearing before a judge to explain the waiver.
- You have selected the lawyer.
- You would not be able to hire the lawyer unless you waived your constitutional right.
Division of fees
At times, the lawyer that you hired will hire a lawyer in another firm to help with the case. You must agree to the hiring of this other lawyer. If that happens in a case involving personal injury or property damage resulting from wrongful conduct, then this agreement must be in writing, and the lawyer with primary responsibility for your case is entitled to a minimum of 75 percent of the fee and the attorney with secondary responsibility is entitled to a maximum of 25 percent of the fee. If the attorneys of the different firms participated equally in this type of case, they will have to go to court to determine how the fee will be split. The splitting of fees between the law firms should not affect the amount of money that you receive. If another law firm is hired in a case in which you are charged an hourly fee, the fee may be divided in one of the following two ways: The fee can be divided based on the work done by each lawyer or law firm, or you and the lawyers can agree in writing as to how the fee will be divided.
Fees set by a judge
There are more than 200 Florida statutes that allow for an award of attorney’s fees in certain legal actions. In most instances, such a fee would be set by a judge.
In all probate matters, which includes guardianships, fees are either set by the court or are subject to review and approval by the court either periodically or at the time the matter is finalized.
The amount of attorney’s fees set by a judge can vary greatly, depending upon various factors. The guidelines for the judge setting such fees are provided by the attorney’s Rules of Professional Conduct, Rule 4-1.5(b):
- the time and labor required, the novelty, complexity, and difficulty of the questions involved, and the skill required to perform the legal service properly;
- the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;
- the fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature;
- the significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation, and the results obtained;
- the time limitations imposed by the client or by the circumstances and, as between attorney and client, any additional or special time demands or requests of the attorney by the client;
- the nature and length of the professional relationship with the client;
- the experience, reputation, diligence, and ability of the lawyer or lawyers performing the service and the skill, expertise, or efficiency of effort reflected in the actual providing of such services; and
- whether the fee is fixed or contingent, and, if fixed as to amount or rate, then whether the client’s ability to pay rested to any significant degree on the outcome of the representation.
A survey of judges has indicated that they give the most weight, in setting a fee, to the results obtained by the lawyer. Also considered is the fee customarily charged for similar services in that same locality. The need for having a judge set the fee, and the resulting uncertainty to the client, can usually be avoided by the client and attorney entering into a contract that sets the fees and requires the judge’s approval. Often, it is granted.
Fees awarded by the court
In some cases, a client may receive an award of attorney’s fees as part of the client’s recovery. This is an amount that will be owed by the opposing party to the client. The amount awarded by the court may be more or less than the amount that you already have agreed to pay your attorney. These possibilities should be provided for in the initial fee arrangement.
Fees for divorce cases
Divorce or dissolution of marriage cases merit special discussion, because legal fees for this type of work may include one or a combination of all the fee arrangements already mentioned, except that lawyers may not charge contingent fees in divorce cases. In a dissolution action in which the husband and wife already agree on all matters — such as support, property and custody — a lawyer can set a fixed fee, provided that the matter remains uncontested until completion of the case. Since legal fees are partly determined by services rendered, it usually is not possible to determine in advance the total fee for a case that may have contested issues. In such a case, a lawyer may advise the client of the lawyer’s minimum fee — as the least it would cost — and, additionally, of the hourly charges for time that might be expended beyond the minimum time given in the lawyer’s original estimate. Certain complications often arise in family law cases such as divorce. For instance, the court may order one spouse to pay all or a part of the fees and costs of the other spouse. In addition, the court can order a spouse to pay fees to his or her own attorney should a fee dispute arise.
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