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Mr. Green: Let’s Talk Money

Disclaimer: This article or humorous commentary is in no way intended to offend anyone and further is ONLY provided as entertainment, a general overview or background information.  This article is NOT legal advice or a legal opinion.  You should not rely on any information gathered in this article as a basis for any particular course of action or a substitute for legal advice.  Because every case is different, you should always seek formal professional legal counsel specific to your case.  No warranty of any kind, expressed or implied, is given and in no way does this article constitute any attorney-client relationship.  (Sorry. *wink* I’m an attorney…what’d you expect. You know we have legalese and disclaimers for everything.)

MR. GREEN:

LET’S TALK MONEY

 

I agree that it is rare that the average person has to hire an attorney but it is almost inevitable that at some point in your life you or someone close to you will need to.  You never know why or when you will.  And when the time comes, the biggest concern for most is the cost.  So let’s talk money!

There are basically three ways that an attorney is paid.

TRADITIONAL RETAINER METHOD:  The most common and traditional method of payment for an attorney.  The client pays a lump sum of money, which the attorney puts into escrow.  As the legal work is performed, the client is billed at the attorney’s hourly rate and the money is deducted from escrow.  Each attorney or firm sets their own hourly rate. 

Common hourly rates range between $150-$300 in Kentucky, but can be whatever.  Fees are typically charged at the fraction of an hour (1/10 or ¼).  Retainers are usually between $1,500 and $5,000, but could be more.  The attorney or law firm generally bases the retainer on the amount of work that is anticipated; however, it is not uncommon for the retainer to be exhausted.  At that point, the client may just be billed on a regular basis or required to replenish the retainer.  If any portion of the retainer remains, it goes back to the client.

FLAT FEE:  Legal work can be expensive.  Due to the economy and other factors, attorneys in recent years have moved more towards using flat rates or value pricing.  This has allowed some attorneys or firms to offer ala carte services or a flat fee for the entire case.  The most common cases this method is used include drafting a contract or a will, criminal matters, uncontested divorces and name changes, i.e. matters that may be relatively routine and uncomplicated.

CONTINGENCY:  This is the ones clients always expect, ask for and hope for, due to the commercials we all have seen.  “I don’t get paid until you do.”  Contingency fee means your attorney will not recover unless you recover through a settlement or successful litigation.  Upon recovery, the attorney will be paid a certain amount or percentage that was agreed upon at the time the client hires the attorney or firm.  This is generally used for personal injury matters, workers comp suits and probate cases.  The contingency fee has to be reasonable and not excessive and the amount is sometimes statutory. The contingency fee is generally a percentage because the recovery amount is usually unknown until the end.  

Regardless of the way you are billed for a case, some issues need to be considered when hiring an attorney.  Below are some tips to help you:

  1. Be sure to get a contract to protect yourself.  It is good practice for an attorney to have you sign a contract stating what the billing practices are and what you will be responsible for.  If you sign a contract upon hiring an attorney, ask for a copy and be sure to read it carefully before signing.
  2. Be sure of what you are paying for, i.e. the cost and what services the attorney intends to provide.   
  3. Be sure of payment terms.  Ask questions.  Are credit card payments allowed?  Is there an extra fee to pay with credit or debit cards? How soon after bills are sent will payment be due? 
  4. Regardless of which of the methods above are used, most times clients are responsible for their own filing fees.  But some offices also require the client to be responsible for postage, long distance, travel times faxes, letters, calls and emails. NOTE: Speaking of calls-your attorney needs to know important info as it relates to your case, but not always in real time with blow by blow details.  Just about all attorneys bill for phone calls and if not, it is still true he/she is not your “friend” to chat it up with.  Believe me, you would much rather your attorney be working on resolving your case, then chit chatting with you about who you think is going to win March Madness or your pet fish.  You should not be discouraged from calling your attorney, but decide what is important for your case and how urgent it is before you call to chit chat.  Besides you are getting billed for it, and most times you have enough “free” friends to chat with that are not billing by the hour.  Most times a message is sufficient and your attorney will call you if follow-up is needed.
  5. Pay your attorney as agreed.  Most attorneys are not rich as you would perceive. They have employees (and their employees have families), overhead, CRAZY amounts of student loans and as my son would say 15 year olds who need lots of food and shoes. (my son Rico says “Hello” and “Thanks” by the way)

 

Thank you for reading!   If you like this article or found it helpful, be sure to read my others posted and stay tuned for future ones.  Also, please leave comments here and be sure to tell a friend.  If there is a topic you want to see or you have a general question, you can leave it here or reach me at nichole@kentuckianalaw.com.

Nichole T. Compton, JD/MBA

Nichole T. Compton is an attorney, a business owner and a certified mediator among other things. She is licensed in Kentucky and federally. Her firm, the Compton Law Office, PLLC is located in downtown Louisville, and handles matters that affect the average working family and small businesses. Nichole is a mother to one child Rico and spends her leisure time traveling doing motivational speaking and giving seminars, in addition to her service to the community and family responsibilities. Nichole has her Juris Doctor and MBA focusing in Entreprenuership.

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