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Attorney Prices and Rates: Everything You Need to Know

legal-fees-billable-hoursAnytime you are in legal trouble, attorney prices are always a major concern. Attorneys have a reputation for being extremely expensive.  So most people tend to avoid hiring one if they can help it.

But what happens when you have no choice and you need to hire an attorney? First of all, it’s helpful to know how to hire a lawyer, but it’s also a good idea to understand attorney rates and how they work so you don’t get in over your head with legal fees.

Below are the major key terms and concepts about attorney prices that are important to understand before you hire an attorney.

Engagement Letters

Before you make the hiring decision, it’s a good idea to consult with a couple different attorneys to compare their prices. After you talk to them, each attorney will explain their fee arrangement and present you with an engagement letter.

The engagement letter is a contract that explains what work will be done and how the attorney rates will be charged. Once you decide which attorney to hire based on the prices and experience level, you will have to sign the engagement letter and agree to pay the attorney rates as specified.


Many attorneys require a deposit or an up-front payment before they will begin work. This fee is called a retainer.  It is usually paid right after the engagement letter is signed.  Attorneys typically require that you have paid more than they have billed you to that point; this is largely because attorneys fear they will perform the work and not get paid.  If you choose to fire your attorney or the legal work is completed for less than the retainer amount, your attorney must return the remaining amount to you.

The amount of the retainer will depend on the type of legal work, the amount of work required, and the lawyer’s experience level (more about how much lawyers cost can be found here).

Contingency Basis

Sometimes legal work is done on a contingency basis. This basically means that the attorney rates will be zero unless you win your case.

If the case is successful and you receive a financial award or settlement, the attorney will be paid a percentage of your winnings. The amount typically ranges from about 33-40%, depending on the potential size of your winnings and the quality of your legal claim.  Look for the exact amount in the engagement letter.

Unfortunately, contingency cases are only used in a limited set of cases such as personal injury lawsuits. But the good news is that the expensive attorney prices you would normally pay will not come out of your pocket unless you actually win the case.

Hourly Rates

The most common way that attorney prices are paid is based on an hourly rate. This means you must pay the lawyer a certain amount of money for every single hour of work performed. In other words, it can get expensive.

Each attorney and law firm has a different hourly rate that depends on a number of factors, including the area of law, the lawyer’s experience level, and even the city in which the attorney works. Hourly attorney rates can vary from under $100 to over $1000 per hour, so make sure you read the engagement letter carefully before you sign it.

Billable Hours

If you are paying an hourly rate, the total attorney price that you will pay will be determined by the number of billable hours.

Billable hours are just that – the total number of hours the lawyer spent performing work directly related to your case. This can include researching, writing, sending emails, talking on the phone, etc., as long as it pertains to your case.  That being said, never assume that conversations with your lawyer will not cost you money, because the bill can add up fast.

In the most common billing scenario, attorney prices are equal to the total number of billable hours multiplied by the attorney’s hourly rate.

Flat Fees

Certain types of legal services are performed on a flat fee basis. A flat fee means the attorney prices will be stated in full upfront in the engagement letter. So if the engagement letter says the service costs $2000, you will pay $2000 no matter how much time the attorney spends working.

Flat fees are only offered for some services, usually ones that are transactional in nature. However, flat fees are occasionally used in other cases too. Filing a trademark or provisional patent, incorporating or forming an LLC, and drafting a will are some examples of services that can often be performed on a flat fee basis.


Attorney rates and prices can be very complex, especially when different billing methods are used within the scope of a single project.

For example, if you hired an attorney to help with starting an LLC and hiring your first employee, the lawyer might charge you a retainer up front, a flat fee for the LLC formation, and bill you by the hour to draft the employment documents.

The best way to avoid excessively high legal fees is to always carefully read the engagement letter before you sign so you know exactly what you are getting yourself into.  That’s why it’s extremely important to understand the basics of how attorney rates work before you make the important decision to hire an attorney. It is also extremely valuable to get quoted attorney rates from different attorneys and compare them…one lawyer may be much higher than the next, even though both would do an adequate job.