Lawyers may receive their salary or commission (just like any job), or they can charge a flat fee. Some attorneys make significantly more money depending on their reputation, expertise and clientele base than others.
To increase profitability, setting fair hourly rates is key to legal practice success. Unfortunately, however, too often lawyers become stuck in their ways and fail to adapt their rates with changing times.
Fees
Integral to any law firm’s profitability lies the practice of streamlining billing practices. By offering clients multiple methods to pay invoices quickly, your firm can collect fees more rapidly; and with many legal matters requiring evidence acquisition costs to move the case forward quickly.
Fee arrangements depend on the nature and practice area of your legal matter and attorney, but typically legal cases follow either an hourly rate or retainer model. Most attorneys’ hourly billable time covers work they are doing on your case such as responding to emails or phone calls, writing motions and legal documents and conducting legal research; it does not include lunch breaks or office chatter which would not count against their hourly billable time rate.
Some attorneys charge a flat fee for more predictable tasks such as writing wills or real estate transactions without complications, while other lawyers work on contingency, meaning they only get paid if their client wins their case; this arrangement often applies in personal injury and workers’ compensation claims but may also apply in other types of disputes.
Retainer fees are advance payments made to an attorney from their clients in order to begin working on a matter. They are usually kept in a trust account and invoiced against as work on the case progresses. Some attorneys also offer “evergreen retainers,” which is a lump sum that stays in their trust account and replenishes when it reaches a minimum balance, making this arrangement popular with businesses and clients who require ongoing legal advice. Attorneys may accept security deposits instead of retainers, with clients keeping this money once legal proceedings have concluded. Before starting work with an attorney, make sure all terms of your fee agreement have been established prior to commencing their representation.
Retainers
A retainer is an upfront payment to cover future legal services. Lawyers will determine this fee using their hourly rates multiplied by how long they believe your case will require, then as work on your behalf is completed they’ll bill against this retainer.
Many lawyers utilize a retainer contract which outlines specific details about the agreement such as how funds will be drawn from your retainer fund, when and how statements will be sent, how to dispute charges, as well as any standard or additional fees that may arise while representing you. Additionally, such an agreement should also include details regarding standard fees as well as unexpected costs incurred throughout representation.
Retainers provide clients with peace of mind that legal services will always be available when needed, eliminating the hassle of calling different lawyers individually and waiting weeks to schedule an appointment.
However, retainer contracts must be carefully drafted in order to comply with state law and bar association rules. There may also be limitations on how much of your retainer a lawyer can keep should they no longer represent you; your contract should therefore clearly set forth what services will or won’t be included as part of their representation agreement.
Legal billing software can reduce the administrative aspects of retainer contracts by making it easy for attorneys to accurately track time and produce error-free bills that can easily be shared with clients via email. This allows attorneys to spend more time on client matters rather than administration. Give CaseFox a try today to see how easily it makes managing cases and payments for you and your attorney!
