One of the first questions that I am asked by a prospective client is how much is this going to cost me and how can we work out payments. Most people even ask this question over the telephone when they are scheduling their initial consultation to meet with me. As a general practice, I do not quote fees on the telephone, because the amount that I quote is based on the complexity and number of issues in your case and the time that I anticipate having to spend on it.
Lawyers charge their fees in two main ways when it comes to representing someone in a divorce case: hourly or flat fee billing. There are, I suppose, advantages to both.
The tried and true method that most attorneys, especially attorneys who have been out practicing for a while is to charge the client an initial retainer. That retainer is then placed in their trust account and when the attorney has completed work in that case, he bills the client and withdraws the amount of his bill from the client’s retainer and places that in his law firm operating account. Generally attorneys will have a minimum amount of money that they require the clients to keep in their trust account and they send a bill every month (or sometimes more often than that).
The good thing for the lawyer is that they know they can get paid on a case. The downside for most attorneys is that after the initial payment, many clients do not pay another dime to their attorney even if it has been fairly earned by the divorce lawyer. So many attorneys will make sure that their initial retainer is substantial enough to get them pretty far through your case, if not all the way through, without completely depleting it.
You can probably see how this is bad for the prospective client. First, you do not know how much the case is going to cost you. You do, however, know how much it is going to cost you to get started. In this situation, it is almost like writing a blank check to your attorney because in most cases it is difficult for an attorney to judge exactly how long it is going to take him to adequately represent you because there are so many factors an things outside of your lawyer’s control. There is also a potential conflict of interest, because you want the lawyer to represent you well, but also not to bill you to death. You lawyer, on the other hand, wants to make a good living and support his family. So he may be interested in nickle and diming you to death on every thing he does in your case.
Because of the initial retainer requirement and because many clients do not pay anything more after the lawyer has gotten to work, many divorce attorneys do not allow for payment plans because they want to make sure they get at least their retainer up front.
So what’s an example of this? An attorney may tell you that in order for you to hire him/her to handle your divorce you would be required to pay a retainer of $3000.00 into their trust account. Then they bill you by the hour for all of the work they and their staff do on your case by the individual who has performed the work’s hourly rate. Many divorce attorneys charge between $150 and $300 per hour depending on their experience, ego and other factors. That means that your 15 minute telephone call to check on the status of your case will cost you anywhere from $37.50 to $75. I hope you enjoyed that phone call!
Another option for billing in divorce matters is flat fee billing. Flat fee billing is where you know exactly what it is going to cost you to get your divorce up front. Generally, these fees are earned when paid so your attorney will not be billing you by the hour and you won’t be entitled to a refund if the case is resolved quickly. On the other side of that coin, however, you won’t be billed more if your case is more time consuming than the lawyer initially expected either.
Flat fee billing means that you will know when you leave your initial consultation what your divorce is going to cost you. It may be split up into different phases of your case or it may all be due at once.
The flat fee may actually give you sticker shock when you first hear the number. It may sound like a crazy quote to handle your divorce case when you compare it to the other attorney who bills by the hour. But when you actually calculate the number of hours the attorney will most likely bill you for, along with the activities you get billed for, and the rate at which your attorney bills his divorce clients (probably $200-300 per hour), it adds up quick and you will most likely surpass the flat fee quote.
So, what’s an example of flat fee billing? In my office, I handle almost all of my family court matters on a flat fee basis. The amount changes depending on the complexity of the case, but the flat fee frees up my time because I do not have to spend extra time keeping up with how much time I am working on your case. I do not have to worry about sending you a bill each month to collect what you owe me. You do not get billed extra for telephone calls, e-mails, or in-office appointments. It is all included. I typically break my fee up into three phases. The first payment is due when you hire me and is typically 1/3 of the total fee. The second 1/3 payment is usually due 90-120 days into the case and is known as the “discovery phase.” This leads us through discovery and mediation. The final phase is the trial phase and it is due 60 days before the initial trial date for your case. The cool thing about the three phases is that if your case settles early on (or before the next phase payment is due) then you do not have to pay any additional fees, so that can encourage you to work towards a settlement in your case if that is a good option for you.
Finally, no matter which way your attorney bills, you are almost always going to be responsible for all out of pocket costs. This usually includes court fees, service of process fees, mediation costs, Guardian ad Litem fees, expert fees, subpoena fees, and more.