Common Billing Methods Lawyers Use

Billing is very important to discuss with your lawyer and most have a preferred method that works best for them.  The billing method your potential lawyer is using is a great question to ask during your consultation. If you’ve already hired a lawyer the billing method should be in your engagement agreement. Billing in the legal industry is typically done hourly but here are a few other common billing methods attorneys may use:

Hourly Fees. Most legal practice areas work on the hourly fee. The attorney will bill by the hour, rounding up to the nearest .1 of an hour, or every 6 minutes. As an example, if an attorney spends 8 minutes working on a project, the client will be billed .2 (12 minutes). This is because the 12 minute mark is the next 6 minute increment after the 6 minute mark. Just like a doctor, accountant, project manager, etc., an attorney is typically not creating a tangible product. The client is paying for their advice based upon an expertise, including years of education and the six-figures of loans that they may have taken to pay for school. An attorney’s product is their time, which is why hourly billing makes sense in most cases.

Contingency Fees. The attorney’s fee is based on a percentage of the amount awarded in a judgment or negotiated in the settlement of the case.  If you lose the case you will still often be required to pay expenses. You will not see contingency fees in family law cases, unless it’s to collect on a judgement in a family law case.

Flat Fees. Some may charge a flat fee for certain types of legal matters. These cases are typically very simple in nature and can be handled through forms or standardized practices. Flat fees are common in estate planning and uncontested divorce.

Statutory Fee. In some jurisdictions, a statute or regulation may set the amount an attorney can charge for a particular service. Colorado does not have statutory fees for any legal services in family law or probate.

It’s important to review your engagement agreement and discuss these matters with your lawyer.  We recommend the YouTube video on How to Keep Your Legal Fees Down for when you hire an attorney.