Understanding lawyer fees is crucial in order to make sure you are getting the right legal help without exceeding your budget. Legal services are normally pretty expensive, but it’s often worth paying the price in order to make sure you are protected. Finding a good lawyer to hire can end up saving you thousands of dollars (and a lot of stress) down the road. But before you find a lawyer, it’s always wise to get a solid grasp of lawyer fees and how they work. If you know what kind of prices and costs you can expect upfront, you will have a better shot at finding a lawyer that meets your needs and budget.
How Lawyer Fees Work
Before you can estimate your legal bills, you need to familiarize yourself with how lawyer fees work. Lawyer fees are determined on a case-by-case basis. There are a number of different factors that affect lawyer rates, including the type of legal work, the billing method, the lawyer’s experience level, and your location. Below is an explanation of the most common types of lawyer fees to help you get a basic understanding and estimate how much you will pay for legal work:
A lot of legal work is done on an hourly basis. Hourly fees for lawyers are pretty self-explanatory – you pay a set rate for each hour of work your lawyer completes. Generally, your lawyer will ask you to pay for a certain number of hours upfront in what is known as a retainer payment (see more below). Any work beyond what the retainer covers will be billed hourly at the end of each month.
Billable hours have historically been the most common billing practice in the legal industry. However, times are changing and lawyer billable hours are being resisted. These days, other fee structures are becoming more and more common.
Flat fees are becoming very commonplace in the legal industry, particularly for certain practice areas where the amount of work is pretty consistent from one case to the next. A flat fee means the lawyer will give you a set price upfront that will cover all the work, regardless of how many hours the work takes.
Flat fees are especially common for trademarks, patent filings, and incorporations, and even things like DUI cases and speeding tickets. Flat fees are favorable for clients because it feels more comfortable having control and knowing beforehand exactly how much you will pay.
Sometimes lawyers will use a hybrid approach between flat fees and hourly fees. Capped fees are essentially the same as hourly billing, but with a minimum and maximum amount that can be billed.
These capped fee structures give clients the benefits of knowing how much they will pay beforehand, but still allow the lawyer more flexibility with regard to the amount of work that can be billed.
A retainer is an upfront fee paid to a lawyer before work begins. Most lawyers will require a retainer payment because they want to ensure that they are getting paid for their time. If you are billed hourly, the retainer payment will cover a certain number of hours. That number is a good estimate for how much the lawyer fees will be in total, but it could be more or even less.
If the amount of hours exceeds the retainer payment, the lawyer will send you a bill for the additional time at the end of the month. However, if the amount of hours billed is less than the amount of the retainer, the lawyer must return the additional money.
Lawyers are required to keep retainer payments in a special bank account called a client trust account. A trust account ensures that the lawyer does not take your money until the work is completed and the lawyer fee is earned.
Experience, Caliber, and Location Affect Lawyer Fees
Regardless of the type of legal work and billing method, lawyer fees depend largely on the experience level and caliber of the lawyer or law firm. More experienced lawyers with large, prominent law firms will always charge more, while younger lawyers, solo practitioners, and small law firms will charge less.
Whether you decided to hire a large law firm or a small one depends on your specific needs and circumstances. If you are dealing with highly sensitive legal matters with high stakes in terms of the financial outcome or importance to your life or business, you may want to consider working with a more prominent and expensive law firm. Generally, the top lawyers in the legal profession work with these large firms, so you can rest assured that you are getting quality legal work.
However, smaller law firms are normally more affordable, and they can also be more available when you need them and hands-on when they work with you. They usually have fewer clients, and therefore can provide more attention to each one, while still providing an adequate level of quality for most legal matters.
The location also is a factor to consider for lawyer fees. Most of the time, lawyers in big cities like Los Angeles, New York, Chicago, Boston, or San Francisco will charge higher rates than lawyers of the same experience level in smaller cities. This is basically just a function of the different market sizes. Large cities have more people, and therefore larger markets for legal services. Thus you will find more lawyers, more clients, and more lawyers with high prices.
Average Lawyer Fees for Common Legal Services
The average amount you will pay will depend on what billing method is used, where you are located, and the experience level of the lawyer, as explained above. But it’s also important to consider the practice area, or type of law. Highly specialized types of legal work are generally more expensive, while everyday services will be more affordable. Below are estimates of average lawyer fees for some of the most common types of legal services.
Most intellectual property lawyers will file trademarks for a flat fee. Trademark filings themselves are pretty basic, but you want to make sure you do a thorough trademark search beforehand to make sure you aren’t infringing on another mark. The search process is where it can be especially important to have a lawyer.
Typically, a trademark lawyer will charge somewhere between $500-2000 to perform a trademark search and file a trademark. There are also filing fees which are a few hundred dollars. Here is more info about how much a trademark costs.
Patent applications are significantly more complicated than trademarks, so it’s highly advisable to work with a patent lawyer in most cases. Similar to trademarks, many patent lawyers will file a patent for a flat fee. However, oftentimes there is work that remains to be done after the application is filed, such as responding to the patent office’s questions and/or possible rejections of your patent claims. This work may add to the total cost of filing a patent.
Patent lawyer fees can range from as low as $500-$1000 for just a simple provisional patent filing, to as much as $10,000-$25,000 for more complicated patents. On average, patent lawyer fees, plus filing fees, will probably amount to somewhere around $10,000.
Forming an LLC or Corporation
Again, many lawyers will do business formation and incorporation work for a flat fee. Usually, legal costs to form an LLC will be less than forming a corporation, since the differences between LLCs and corporations make LLCs a bit simpler to set up. In either case, it’s beneficial to work with a lawyer to ensure your company is properly structured from the start. Failing to do so can be devastating when your company becomes more successful in the future.
Attorney fees for an LLC will probably set you back somewhere from $500-$2500. There are state filing fees involved as well, but many lawyers will cover those costs as part of their bill. Corporations are likely to be a bit more expensive, likely somewhere between $750-$3000 on average.
A lot of lawyers that do basic litigation work will take DUI cases because they are fairly straightforward. But you’re best off working with a lawyer that only focuses on DUIs or has a lot of experience with DUI cases. DUIs are often charged on a flat fee basis, but some lawyers prefer being paid hourly. Make sure you know how your DUI lawyer will bill you upfront to avoid any unexpected costs.
The total costs of a DUI, all things included, are likely to be around $10,000-$12,000. The DUI lawyer fees alone will probably fall somewhere between $2000-$5000.
Fighting a speeding ticket is not always worth the time and money required, but if you are at risk of losing your license or facing significant car insurance increases, sometimes it is a good idea. It’s especially worth it if you feel you were ticketed unfairly. If you decide to fight your traffic violation in court, a lawyer can make the process a lot less stressful and give you a better shot at winning.
Lawyers may do the work for a fixed fee if it is something that they do on a regular basis. Otherwise, they could bill you hourly. Lawyer fees for fighting a speeding ticket will probably fall somewhere between $500-$1200.
Divorces can get ugly, and when they do they can also get expensive. Depending on the amount of assets at stake in a divorce, lawyer fees can fluctuate significantly. But, since it is normally unclear how long a divorce case will carry on at the start, lawyers typically prefer to be paid hourly for divorce work.
Divorce lawyer fees could be as low as $1000 if the divorce is amicable and you just need help with the paperwork. If the divorce is highly contested, especially when it involves high net worth individuals, the lawyer fees could be in excess of $100,000.
Bankruptcy can be a painful thing to deal with, but it’s often one of the best ways to get out of debt and get a fresh start financially. You should plan on hiring a bankruptcy lawyer to advise you through the process because it can get highly technical.
Bankruptcy lawyer fees will depend on what type of bankruptcy you are filing for and how much debt you have. For an individual filing bankruptcy, total lawyer fees will typically be around $2000-$5000. For businesses, it is usually more expensive and will depend on how large the company is and how much debt it owes. Here’s some more info on how much a bankruptcy lawyer costs.
Setting Up a Will or Trust
Writing a will is an important step in the basic estate planning process. There are a ton of resources out there to write your own will, but if you have any significant amount of assets, you are better off working with an experienced estate planning lawyer. You will want to ensure everything is structured properly and that your property is put in a trust so that you can avoid probate. Some lawyers will draft a will or set up a trust for a flat fee, while others will do it on an hourly basis. It may depend on how much estate planning work will be required for you.
Lawyer fees for a will or a trust could be as low as $500 if it’s just drafting a simple will. But if you own multiple properties and have a higher net worth, there are a lot more considerations that come into play, so your lawyer fees would probably be closer to $3000-$5000.
How much a lawyer costs is a function of many different factors, as illustrated above. Before taking any actions, you should consider the complexity of your legal situation. If it is something pretty simple, you are fine working with a more inexperienced lawyer, which will be more affordable. If it is something very serious with significant consequences, it’s often worth the extra expense to hire a lawyer that is specialized and highly experienced.
At the end of the day, considering attorney fees is an important part of the hiring process for most people. By having an understanding of what is common, and how lawyer fees work, you will be in the best position to find the right lawyer for your needs and budget. The best way to go about finding a lawyer that is right for you is to get comparisons in terms of prices and experience levels. By using LawKick and our innovative marketplace approach, you can easily get price quotes from a number of different lawyers in your area for free, and it only takes a matter of minutes.