Understanding the Financial Terms
Be sure you understand the financial terms a lawyer is offering you. It comes as a shock to many legal customers when they learn that they are billed by the minute for talking on the phone to their lawyer and for their lawyer's talking on the phone to the other side's lawyer. Billing in this manner is the norm. It is how lawyers earn a living. Think of it as being similar to a store's inventory. Just as a store does not give away merchandise, lawyers do not give away their time. Some attorneys bill by the precise amount of time spent, while others bill in fifteen or twenty minute increments. Even if your lawyer spends three minutes reading a note you sent him, he may bill you for his fifteen-minute minimum. If a fee agreement does not address the issue of increments, ask the attorney about it and consider adding language to the agreement to cover this point. Treat the fee agreement the lawyer proposes as a starting point, not a final document. If it contains things you don't like or is missing things that are important to you, talk to the lawyer about making the appropriate additions and deletions before you sign it.
You should also find out what you will be charged for in addition to the lawyer's time. Will you be charged for postage, photocopies, long-distance telephone calls, faxes, expert witness fees, detective fees, supplies, travel expenses, courier fees, computerized legal research, or anything else extra? Remember, lawyers routinely charge for these extras, and these costs can mount up quickly. For example, some lawyers charge twenty-five cents for each photocopy they make or five dollars for each fax they send or receive. These extras are typically itemized in the fee agreement. If they are not, find out what each charge will be, and ask the lawyer to estimate how much they will cost you each month so that you can be prepared for the bill when it arrives. A lawyer will not be able to quote you an exact figure because future expenses are impossible to predict and depend to a large extent on how the other side conducts its case. The lawyer should, however, be able to give you a rough estimate of a range of monthly expenses you should expect to incur.
If a particular charge seems excessive (the per-page rate for photocopies, for example), discuss it with the attorney. Perhaps an adjustment can be made. If not, at least you will have learned of the issue ahead of time and can choose a different lawyer if the problem is significant enough.
If you hire this lawyer, will other people in the office, such as paralegals and secretaries, be working on your case? If so, at what rates will their work be billed? In many cases, paralegal work will be billed at a rate lower than the attorney's, and secretarial work will not be billed at all. If this is the case, you can control your costs to some extent by talking with a secretary or paralegal about certain issues instead of speaking directly with the attorney. You might want to consider meeting with the other people who will be working on your case before you hire a lawyer.
In some firms, certain lawyers are the "rainmakers" who bring in the business, while others do the legal work. The rainmakers are like car salespeople, and the lawyers who do the work are like the service department. The friendly, fatherly rainmaker who lures you in as a client may not be the one who does the actual work on your case. On the other hand, you may find that you relate better to the young associate assigned to your case than to the lawyer you originally thought you were hiring. Moreover, the younger lawyer's hourly rate will usually be lower. Even so, you may not appreciate having your case handed off to an inexperienced stranger. That's why it's a good idea to find out before you sign a contract who will actually be doing the work on your case.
Beware of any language in the fee agreement that gives a lawyer a "lien" or other right to your house or other assets. Such language could entitle your lawyer to encumber your house or bank accounts. Also be wary of language that permits a lawyer to obtain a "confessed judgment." This could enable your lawyer to sue you for unpaid fees and win automatically without your being able to put on a defense.
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