Hiring a lawyer is a taxing experience that is filled with all sorts of unknown variables. Legal matters can be extremely complicated. It is easy for the bills to add up quickly. You should never let a law firm take you for a runaway ride that exceeds your budget. Even though the companies who require lawyers the most usually have the cash flow to afford the best law firms, no one wants to be ripped off as a matter of principle. For this reason, you should take some precautions before you hire a law firm that pads the bill with hidden fees. Let’s consider 7 ways to avoid the hidden costs when hiring a law firm, below.
#1: Ask for Clarifications of the Retainer Agreement
Lawyers are required by the rules of professional conduct to set out the terms of their services, preferably in writing, before the client pays. Unless the matter is a will or simple document drafting billed on a flat-rate basis, a retainer should spell out all the types of expenditures: disbursements, research, document production, hourly rate, etc.
Disbursements are the out-of-pocket expenses that your attorney incurs. These can be for court filing fees, expert witnesses, court transcriptionists, postage, document reproduction, travel, lodging, meals, and anything that can reasonably be linked as an expense that they would not normally incur if they were not working on your case.
Research may not be done by the attorney himself but rather by an in-house staff member such as a paralegal. An attorney may charge a lower hourly rate for use of their paralegal’s services. This makes it easier for them to pay the paralegal on a flat-rate system for work actually carried out for the attorney.
If a lower rate isn’t specified, you will probably be billed for whatever hours the attorney conducts legal research at his hourly rate. If you do your own research at a local law library with access to Lexis Nexis Advanced, you can spend the day looking up cases that relate to your cause of action. In most cases, the case-law can thoroughly be sifted through in a few sessions spread out over a week or few days.
When you hire an attorney who has vast experience in the field of your needs, you can expect the research bills to be a lot lower than someone who is practicing outside of their focus. Lawyers who are acting outside of their local jurisdiction or even pro hac in another state or court may face a much steeper learning curve on the volume of research required.
Document production may have its own specific flat-rate fees or may be simply billed at the normal hourly rates. Most attorneys have their paralegals draft the documents in the cases and simply double-check the work, make a few alterations (if necessary), and sign off on the work. In any case, you can expect an attorney who often drafts these types of documents for similar cases to have a fairly predictable rate for documents. In many cases, they will reuse the same template, over and over, and merely fill in your name, address, and other particulars into the form.
The hourly rate that your attorney charges may be anywhere from $150 to $500 an hour. In some cases, the prices that attorneys charge per hour is arbitrary. It does not relate to the quality of the work. Although more money may provide an incentive for any attorney to work harder, attorneys will only work hard if they feel that there is a relationship and long-term employment opportunities. Hiring an attorney at high rates for a one-off job may not provide enough prospective incentive to induce any obligations.
#2: Set a Budget
Some law firms are opportunistic and will bleed clients dry for any justifiable expense if they think that you’ll simply write off the expenses as overhead at tax time. If you let your attorney know your budget in advance, this will reduce the temptation for the law firm to bleed you dry. Call it the curse of the lottery or what have you, but people have a habit of taking advantage of those when they think you have money to burn.
An attorney who has litigated similar claims before should be able to set a fair price of how much they expect the case to cost based on what they have charged others before. The curveball comes into play when a trial lasts longer than expected or when other novelties and complexities in a case arise. Be prepared to spend a lot more if you don’t have a garden variety case.
#3: Pay with a Credit Card
When you use a credit card, you have additional protections on how your money is spent. If there are any discrepancies between what you are charged and what was agreed upon, the credit card company will intervene and rule in your favor in most cases. The credit card companies are focused on placating consumers who have objective evidence of underhanded business techniques or unexpected charges.
#4: Simplify Your Case
The more complicated that you make your case, the more opportunities a law firm may have to justify additional charges. If you can write a summary of your case and try to stick to the core issues in any discourse, this will save you from surcharges.
#5: Flat Rates
The best way to avoid hidden costs is to ask for a flat rate billing plan. This would allow you to approve of any charges or reject them as they arise. A flat rate that puts a cap on charges is the best way to beat excesses from creeping into the bill.
#6: Shop Around
Don’t act desperate when you are searching for an attorney to handle your case. If you are willing to hire anyone and sign any type of retainer, you will be hit with excess charges. By holding out for the right commercial law firm, you can ensure that your contract matters are resolved within your budget.
#7: Avoid Paying Upfront Fees
Once you hand an attorney money, they can legally rob you. What are you going to do, sue them? In most cases, it takes the support of another attorney to file a lawsuit against a lawyer. For this reason, you should break up payments into milestones to ensure that they complete tasks as requested before rehiring them for more work.
