If you need a lawyer for some reason, then the money is one of the first things that’s going to enter your mind. Attorney fees are seldom cheap, and you might not have a great deal of cash right now. If you need legal representation, though, you sometimes have little choice but to contact a lawyer and figure out a logical way to pay them for rendered services.
In this article, we’ll talk briefly about some different lawyer payment methods and how each one is likely to affect you financially.
Contingency Payment Plans
When you look at different lawyer payment plans, the contingency payment plan often makes the most sense if you are hard up for cash. With a basic contingency plan:
- You only pay if the lawyer wins your suit
- The onus is on the lawyer to win if they want to see any money
You might set up a lawyer contingency payment plan if you are bringing a medical malpractice suit or if you are bringing a faulty product suit. Maybe a product harmed you, and you’re trying to hold the manufacturer responsible.
With a contingency payment plan, you might pay the lawyer as much as forty percent of your winnings if they can win the suit for you. That might sound like a lot, but if they lose, you have to pay nothing.
This payment plan makes the most sense if you don’t have much cash, but a company or individual wronged you, and you want to make them pay for that. This way, even if your lawyer can’t win the suit, you pay them nothing, so you are in the same financial position you were in when you started.
Hourly Fee Arrangements
An hourly fee lawyer payment plan:
- Means you must pay a set rate for every hour of the lawyer’s time
- Means you have to pay the specified amount, regardless of how a suit goes
As a lawyer’s client, you will find an hourly fee payment plan much riskier than a contingency payment plan. You have to pay your attorney, even if you lose the suit.
That means, following a lawsuit, you might be in good shape if you won enough money to cover your legal expenses, and to cover medical bills, lost wages, or any other money you were trying to recoup. If the lawyer loses your suit, you still have to pay them, though, which can devastate you. You might have to liquidate your assets to pay them, take out a second mortgage, etc.
Retainer Fee Arrangements
Private citizens don’t have lawyer retainer fee arrangements very often, but it does happen occasionally. If you have an attorney on retainer, that means you have the lawyer or their firm standing by at all times in case you need to go to court for any reason. You pay them a nominal fee, so they’re always ready, and then you likely pay them an hourly fee in addition to that if you need them in court.
The reason you’d want a setup like this is if you know you have to appear in court pretty often. If you sue people a lot, or vice versa, that’s when you want legal representation on retainer.
It’s costly because you must pay the lawyer or firm, so they’re always at your disposal, and then you also have to pay them when they defend your interests in the courtroom.
Flat Fee Arrangements
Some lawyers will also agree to a flat fee arrangement. They might say you have to pay me X amount of dollars, and I’ll represent you in court for this lawsuit or other legal action. The amount will not change regardless of the outcome.
Like a pay-by-the-hour contract, this is a risky proposition. You might agree you’ll pay your lawyer a set amount, but then you don’t know if you’re going to win the lawsuit or not.
If you do, you’ll be in good shape because, presumably, you can cover that flat rate with no problems and still have money left over afterward. If you lose, you will pay the lawyer fee and get nothing back to show for it.
If you require a lawyer, you will need to figure out which of these makes the most sense for you, depending on your financial situation. It’s better to take on a safer payment option since you can never be sure what a lawsuit’s outcome is going to be.