You might go through quite a bit of your life without needing a lawyer. If so, count yourself as lucky. At some point, though, you will probably need an attorney. You may want ones with different specialities if you have multiple legal situations that require your attention.
You may not know much about hiring a lawyer before you need one. You might not know much about paying them, either. However, you should at least understand some of the basics in this area. You and your attorney must settle up at some point unless you found a particularly nice one who works pro bono.
In this article, we’ll talk about some of the different ways you can pay your lawyer. We will also discuss when each one makes the most sense.
Paying Your Lawyer Through a Contingency Payment Plan
Let’s say you need a lawyer because a person or business entity harmed you. If so, you might file a personal injury lawsuit against them. These lawsuits play out in court every day all across the country. They happen because of medical malpractice, after car wrecks, after someone slips and falls in a store, following a dog bite, because of defective products, etc.
If you hire a lawyer for one of these lawsuits, you will probably pay them on a contingency basis. This payment structure makes sense because if the attorney does not win your case for you, then you would presumably prefer it if you don’t have to pay them anything.
Lawyers usually get 25%-40% via contingency payment plans. The total amount you’ll pay them will only become clear once you see how much money you’re getting through a settlement with the defendant or through a jury’s verdict in your favour.
Many times, personal injury lawsuits won’t reach a jury’s verdict. More often, the defendant will settle with the plaintiff. There’s usually a specific time when a defendant won’t settle. They might feel you don’t have enough evidence to convince a jury they harmed you, so they’ll have their lawyer try to get them off the hook.
If your lawyer wins your personal injury lawsuit or gets you a settlement, you must pay them as soon as you get your money. By doing so, you will square your debt with them. You will probably use the remaining money to pay off your medical bills and to replenish your depleted bank account if you had to miss some work while recovering from your illness or injury.
Paying Them an Hourly Rate
You might also hire a lawyer and pay them according to an hourly rate that they quote you when you meet with them. This hourly rate might vary depending on many different factors.
For instance, you might hire a lawyer at an hourly rate if you’re having them draft your will. You may decide on an hourly rate if they’re defending you in a criminal trial. Some business lawyers want an hourly rate. If you need an attorney because you’re divorcing your spouse, you might pay your lawyer by the hour then as well.
Often, a lawyer will want an hourly rate if they know they’ll likely put in a lot of hours doing whatever job you require. For instance, if you hire a lawyer to help you with your divorce, they can probably bill you whenever you meet with them. They can charge you when they spend time studying your marriage dissolution details. They can bill you when you meet with your soon-to-be ex and their lawyer to hash out the details regarding child support and alimony.
You might not like paying a lawyer by the hour since, in theory, they can keep billing you the longer you need their services. If the situation for which you need them lasts days, weeks, or even months, you might see a staggering legal bill when your time together concludes.
However, many lawyers will not accept any kind of payment plan other than an hourly rate if they do something like criminal defence or divorce law. You may have to play it their way if you want their expertise since you probably will not find another attorney who will accept a different kind of payment structure for these types of services.
Paying Them a By-the-Job Rate
You’ll sometimes find lawyers who will accept a by-the-job rate. If you retain a lawyer’s services because you’re selling your house, for instance, they probably won’t want a by-the-hour rate. Instead, real estate lawyers usually want a chunk of the sale price when they sell your home for you.
That fee might stay in the hundreds, but it can also rise into the thousands quite easily. Some lawyers will want more if you also have them draft a real estate contract, review one, etc. Complex transactions usually cause higher fees. For example, if your real estate lawyer helps you with some complicated title-related issues, they may demand a higher by-the-job rate.
Having a Lawyer on Retainer
Many individuals go through their lives without ever having a lawyer on retainer. It’s a relative rarity, though more common in some business circles. If you own or operate a company, and you need frequent legal counsel, then having a lawyer or even an entire firm on retainer often makes sense.
Some companies need lawyers to draw up contracts if they’re merging with another business entity. Others may want an attorney nearby at all times if individuals frequently file lawsuits against them.
Usually, if you have a lawyer on retainer, that means you pay them a certain amount per month, or sometimes per quarter, regardless of whether they do anything for you or not. That relatively small amount guarantees that they’re available at a moment’s notice if you need them.
Now, you know about the common ways you can pay a lawyer. If you ever hire one, make sure you figure out these crucial details before signing anything.