How to Negotiate a Flat Fee or Hourly Rate With Your Attorney
If you’re not comfortable with your legal costs, you can negotiate attorney fees. Here’s how to negotiate legal fees with your attorney.
To negotiate legal fees with your attorney, compare a few attorneys’ hourly and flat fee rates, and ask what services are included in the costs. You can request a reasonable rate, and reach a fair payment plan and billing structure. Carefully read the retainer agreement before you sign it. Limited scope representation is also a great way to keep attorney costs low.
What’s the difference between a flat fee and an hourly rate?
The difference between a flat fee and hourly rate is the way the attorney bills their client. A flat fee is a set price for the completion of a job. An hourly rate is a set cost for every hour the attorney works on a designated job. Attorneys typically charge flat fees for designated tasks and hourly rates for more complex services.
1. Compare hourly and flat fees.
The first step to negotiating legal fees with your attorney is to compare the hourly rates and flat fees of multiple attorneys. Comparing legal fees from multiple lawyers can give you a sense of how much your attorney should cost based upon your location and legal matter. This can also give you leverage in choosing an attorney that’s willing to fit your budget. For example, you’re more likely to get an attorney whose costs fit your budget by negotiating with multiple lawyers rather than just one.
2. Ask what’s included in the flat fee or hourly rate.
One attorney’s flat-fee may seem cheaper than another lawyer’s hourly rate; be aware of hidden costs. Understand what’s included in your retainer agreement. Certain services may not be included in your flat-fee agreement. The lawyer may charge you extra to complete tasks not designated in the retainer agreement. Make sure you’re comfortable with paying for the services that your attorney will be providing as stated in the retainer agreement.
3. Request a reasonable hourly rate or a flat fee.
Meet with multiple attorneys and propose a reduced hourly rate or flat fee that fits your budget and is within the acceptable range of fees for the legal services you need. The attorney may be more inclined to negotiate if you present their competitors’ lower rates.
4. Change the billing structure.
Ask if certain tasks will be billed differently than others. For example, request to be billed in 5-minute intervals rather than the typical 15-minute intervals. If you spoke on the phone with the attorney for 15 minutes, you’d be charged at the hourly rate for a 5-minute interval rather than a 15-minute interval. Another way you negotiate legal fees with your attorney is that you be charged with a flat fee for certain services and an hourly rate for others. For example, the attorney can complete court forms at a designated flat fee and charge you hourly to appear in court.
5. Inquire about limited scope representation.
Clients can hire an attorney with limited-scope representation. In limited scope representation, the client handles routine tasks and the attorney focuses only on more complex aspects of the case. This can end up saving the client tons of money and end up with the same legal result. Most attorneys are willing to bill clients through limited-scope representation.
6. Carefully review the retainer agreement.
The last step of negotiating attorney fees is to carefully review the retainer agreement. Make sure everything discussed when negotiating with your attorney is included in the retainer agreement. You may want to take some time to review the agreement before signing it.
How to Negotiate a Contingency Fee Agreement
To negotiate a contingency fee agreement, first carefully read and compare contingency agreements from multiple attorneys. These fees are typically negotiable, so you can propose a lower contingency fee, discuss a reduced fee if the case is settled, or request a sliding scale. Make sure to ask how the attorney fees will be deducted.
What is a contingency fee agreement?
A contingency fee agreement is an agreement in which an attorney accepts a designated percentage of a client’s monetary recovery as a form of payment. If a client wins monetary compensation, the lawyer will receive a designated percentage of the client’s recovery. In contingency fee agreements, clients typically do not pay attorneys if their case is lost. The average contingency fee is 30-33% (one-third) of the final monetary recovery.
1. Read over the contingency fee agreement.
The first step of negotiating a contingency fee is to read over the attorney’s proposed agreement. Understand what your attorney is offering so you can level the playing field when comparing contingency fees from other attorneys. Carefully consider the agreement’s provisions and make sure nothing sticks out.
2. Compare it with contingency agreements from other attorneys.
Get in touch with a few attorneys and tell them about your case. If they’re interested in taking it, they’ll offer you a contingency offer. Getting offers from multiple attorneys can help you understand the typical contingency fee based on your location and area of law.
3. Propose a lower contingency fee.
Based on your comparisons and what you’re comfortable with, propose a lower contingency fee to each attorney. The lawyers will likely be willing to negotiate their legal fees and reach an agreeable contingency rate. By proposing your reduced contingency fee to multiple attorneys, you’re more likely to have your offer accepted.
4. Discuss a reduced “settlement negotiation” contingency fee.
You can propose a reduced “settlement negotiation” contingency fee, which means that the attorney’s contingency percentage will be lower if the case is settled outside of court, and higher if the case is settled in court. For example, your attorney can receive 25% if the case settles and 35% if monetary compensation is recovered by court litigation. This can help incentivize your attorney to not reach a lousy settlement outside of court and take the case to court litigation if necessary.
5. Ask how the fees will be deducted.
The way in which the contingency fee is deducted from final monetary compensation can greatly affect how much the client ends up taking home. The client will walk away with more cash if the attorney deducts contingency fees after additional costs (like court and professional fees) are applied to the recovery. So, try to have your lawyer deduct their contingency fee after additional costs have been deducted from the monetary settlement.
6. Request a sliding scale for contingency fees.
Clients commonly request sliding scales for contingency fees. If your case will likely end in a large recovery, an attorney may be more willing to accept a sliding scale for their contingency fee. A sliding scale agreement designates an attorney’s contingency fees based on the amount recovered. The higher the settlement, the higher the contingency fee percentage. For example, a lawyer can agree to accept 20% if the case settles below $100,000, 30% if the case settles above $200,000, and so forth.
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