Tuesday, February 06, 2007

HOW ATTORNEYS GET PAID

One of the most confusing things as an attorney is to try to explain to someone how you actually make a living. Its not easy. People come up to you and ask your opinion on this particular problem or that particular problem. Nine times out of ten, even if do give them free advice they do not listen to what you have to say anyway. Its a very frustrating job let me tell you.

Attorneys get paid generally in 3 ways: Contingency Fees (they make a percentage off your recovery, but you are generally still responsible to pay their costs in going after your recovery); hourly fees (you are billed a certain dollar amount per hour usually with a hefty upfront retainer where the attorney has the ability to draw from monthly); or a flat fee retainer (where the attorney charges a stated amount for a particular job or amount of work. As in medicine, law is a multi disciplinary occupation and certain fee arrangements generally follow the area of law you seek.

Generally with personal injury type cases (i.e. car accidents, dog bites, cases with BIG pay offs...) the attorney will get a certain percentage of your case depending on where the case settles or if the case has to go to trial. Unfortunately, these types of cases force you to use attorneys. The insurance companies you will be dealing with generally will not even take your case seriously regardless of how in the right you may be, unless you are represented by an attorney. Additionally there is a "general" formula for these types cases regarding recovery. Your recovery is generally based on your injury (usually based on your medical bills), your out of pocket expenses, you job losses, as well as current and future pain and suffering and job loss. the insurance companies generally take these losses into account and multiply them by between 2.5 and 3 times. Basically 1/3 goes to your attorney, 1/3 goes to actually pay off your bills and 1/3 goes to you. These are all estimates. And sometimes, if your case goes to trial and there are circumstances which greatly sway the jury in your favor you can often come out with a great deal more (or less depending on the facts).

Business litigation, family law cases, contract cases, other general civil type cases most often use an hourly rate. This of course can end up being very very expensive. Many of these types of cases do not have provisions where the other party is responsible should you win your case. So even if you spend all this money in fighting your case, you still end up paying a great deal of your hard earned winnings over to your attorney. This of course is one of the most important things to find out before you begin these types of lawsuits.

Criminal cases generally use what is known as a flat fee retainer a certain agreed upon amount to perform a certain degree of work. Criminal cases are generally divided into certain stages and most criminal attorneys require separate retainers for each stage of your case. It is very important to understand that in most situations trial fees are NOT included in your fee quote and often will up your legal bills greatly should you chose to go to trial on your case. This is done for a number of reasons, but most importantly, because in reality very few criminal cases actually do end up going to trial; so why pay for some service your attorney did not perform in the first place.

The important thing to understand in negotiating a fee with an attorney is just that, you are negotiating a fee. The attorney may quote you a cost but in many circumstances, the attorney is just making an initial offer of what he would charge to work on your case and feel free to counter that offer with a lower quote. Most attorneys will respect this and work with you in that regard.

If you have any questions regarding this or any other legal matter, please feel free to contact me at the Law Offices Of Carl Simians at (310) 749-4LAW.

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