Looking for a lawyer: fixed vs hourly fee

Choosing the right lawyer is no easy task. One of the biggest aids that will help you in selecting a lawyer is knowing whether they offer a free legal consultation or not. A free legal consultation helps the client get to know the lawyer better and the lawyer will have time to know the client and his legal issue. You will want to maximize and get the most value out of those 30 minutes so we put together a guide on what to ask your potential lawyer during the free consultation.

Of course, one of the biggest deciding factor when choosing a lawyer is the cost. We’ll give you a brief outline on how lawyers establish their fees, the two most common fee structures and how to decide which one is right for your legal matter.

Preparation

Professional courtesy will set the right tone when you go in for your free legal consultation. View your lawyer as a partner that has the skills to solve your legal issue. Don’t drive a hard bargain for lower fees in your initial conversation. You should instead discuss your problem first and then see what payment structure works for both parties.

Lawyers give discounted rates to clients they can build a long-term relationship with. That’s why it pays off to present yourself as a client that’s looking for a lawyer to handle all the legal matters for their business. This will get you better rates but more importantly will help you find a lawyer that’s interested in your business and the industry you’re in.

The Cost of Legal Services

Lawyers set their market rates according to four big factors:

  1. Firm Size – A recent survey has found that firm size is the biggest factor that drives lawyer billing rates. Location, practice area or type of legal service comes second to firm size. It has been found that large firms consistently charge higher fees than smaller ones. A client may be paying a higher hourly rate for the work of a junior associate at a large firm than a senior partner at a small firm.
  2. Location – It’s no secret that lawyers pass operating costs to clients. That’s how the billable-hour system appeared in the first place. As a result, lawyers situated in more expensive cities where the average cost of living is higher will also have higher prices associated with their services. However, thanks to technology, it’s possible to find a lawyer and work with him remotely. It is becoming common practice for a business to hire a law firm outside their country, simply because it’s cheaper to do so.
  3. Experience – It should come as no surprise that a higher level of experience will most often equal to higher rates as well. However, hiring an experienced lawyer can actually save you time and money because it can take them less time and effort to solve a case that they already have experience with.
  4. Practice Area – There are complex legal matters which require time and a great depth of understanding of the law. This in turn can translate to higher rates for complex problems. Drafting a will is going to be cheaper than solving a complex patent litigation issue.

Understand that legal services will always be specific and tailored for each client and the problem they are having; there isn’t a one-size-fits-all solution. If you take in mind the above factors when selecting a lawyer you should be more than able to make an effective and cost-conscious decision.

Hourly Rate or Fixed Fee: Which one should I choose?

Hourly rate

The most common fee structure that you will find among lawyers and law firms is the hourly rate. An hourly rate means that you are being charged a specific price for each hour of work that the lawyer works on your problem. Usually lawyers track their work every six minutes or by the tenth of an hour.

Here are a couple of questions to ask the lawyer:

  • What is the hourly rate and how long will the matter take to resolve?
  • What does the hourly rate include?
  • Does the hourly rate apply to work done by other staff of the firm (law clerks, paralegals, and secretaries)?
  • Do certain fees have different hourly rates?
  • Does legal research and court time have the same hourly rate?
  • Are there any relevant filing fees or disbursement estimates included in the hourly rate?

Getting these matters clear when you first meet is important in eliminating any surprise costs later. Analyze their answers and decide from there: what one attorney does in 5 hours another can do in one.

Fixed rate

Clients have always been interested in getting better rates from lawyers but rising hourly rates have led to lawyers seeking for alternative pay structures as well as there is a lot of business to be had in smaller legal matters. A vast majority of law firm leaders now believe that non-hourly billing has become a mainstay of the legal community.

Fixed fee packages, which were once only considered for well-defined issues, are now available for a wide-array of legal matters. A fixed fee package works by having the lawyer charge a set amount of money in exchange for solving a specific legal matter.

Advantages of fixed rates. Fixed rates allow clients to form an idea about how big of a cost they will incur per matter. Lawyers benefit from fixed rates as they can do away with time-consuming administrative tasks and other issues such as chasing down clients to pay their legal bills.

Be cautious about what a fixed fee package entails. Often a fixed fee package will not include filling fee costs, which in some cases can rise up to a couple of thousands. During the free legal consultation ask your lawyer what such a package includes and if there are any other fees that you should be aware of.

Making a decision

Although you won’t be able to tell how much you’ll have to pay just by reading an article, you should now know enough to make an informed decision. With a little bit of effort you should be able to get quality legal services at affordable prices.

1 Comment


  1. I will only use lawyers that use fixed-fee billing now after two bad experiences with hourly billings that ended way over budget with no warning. If I had known how much more than the initial estimates were, I would have either used a different lawyer that didnt bill by the hour or not even pursued the case

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