Sunday, January 3, 2010

How does an Oregon elder law or probate lawyer get paid?

Lawyer's fees depend upon what you want done and who you want to do it. Some lawyers charge more than others. They justify the higher charges on the theory that they are better lawyers. Like all theories, some people buy it and some don't. In this post I explain the four basic methods of paying lawyers, the role of court costs in the price of litigation, and the way lawyers pass on their business overhead to you.

Lawyers fees come in four basic types: flat fee, hourly, phase fees and contingency. A flat fee is a set fee for a certain service. An hourly fee is exactly what it sounds like--you pay for the time the lawyer works on the case, usually by six minute intervals. Phase fees are variations on the flat fee with a set amount payable for each "phase" of a proceeding. Contingency fees are fees based upon a percentage of the money the lawyer recovers in the case.

Flat Fee

A flat fee is straightforward. I might offer to do a middle class estate plan including wills, powers of attorney, and advanced directives for $700. That is a flat fee. I collect half at the beginning of the job and the other half when the client is satisfied enough with my work to come in and sign the documents. In the old days flat fees were the norm for almost all legal work. Then certain high powered clients got the feeling that lawyers were getting a lot of money and not working very hard. They said, "wait a minute," we want to pay by the hour and thereby make sure that our lawyer is actually working on our cases. A few decades later most lawyers were working by the hour. Now the tide is changing again, as more and more Bar associations advise lawyers to abandon the hourly rate. The attractive thing about a flat fee is the certainty. You know what your legal services will cost and you aren't scared to call your lawyer for fear of the next monthly bill. The drawback is that a highly automated lawyer with good support staff may be able to do your $3,000 flat fee legal job and get to the golf course faster than you can get home from the appointment.

Hourly Fee

The hourly fee pays the lawyer for the time he or she puts into the case. Time is kept in tenths of an hour and billed monthly. Hourly rates in Multnomah County run between $200 and $250 per hours, although I have heard rates as high as $350 per hour. The advantage of the hourly rate is that you only pay for the time the lawyer works on your case. The disadvantage is that you pay for every minute the lawyer works on your case. Whether this works out for you will depend upon to what extent the lawyer has billed earlier clients for the job of learning the issues that arise in your case. If your case is simple and all the issues  are familiar to your lawyer, the hourly billing system works to your advantage. If unusual issues arise and your lawyer has to do legal research or make unexpected trips to court, the hourly rate works against you. In the latter case, you end up paying for the lawyer's education so that he can do his or her work more efficiently for the next client. This is great for the next client but not so great for you. The disturbing thing for most clients faced with hourly fees is the uncertainty. It looks like a carte blanc for the lawyer to pick up your file and do a little work on if for $230 an hour any time the office bank account is a little low.

Phase Billing

Phase billing is a type of flat fee billing designed to fit cases in which the amount of work involved is unpredictable. Most cases that will be filed in court fit this description. When  someone files a probate for a deceased family member or a guardianship for an elder with dementia, the lawyer and client do not know whether other interested people will object to the proceeding or whether court appearances will be necessary. Thus, the lawyer and client agree that the client will pay a flat fee for each "phase" of a proceeding. The lawyer might charge $1,200 for filing of a probate, serving all the people required to be served with the petition, obtaining the tax identification number for the estate, publishing notice in the newspaper, and supervising the initial inventory. If there is a missing heir, the client will be charged an additional fee for an heir search. If there is a creditor who claims to be owed money and the claim is disputed the attorney would receive a flat fee for that process. Phase billing fee agreements tend to be complicated because the agreement must carefully set out the lawyer's and the client's responsibility during each phase of the case. On the other hand they allow the client to know both the best case scenario and worst case scenario. The advantage for the lawyer is that it allows the lawyer to use office efficiencies and relieves him or her of the drudgery of time keeping. I hate time keeping and am working on some phase billing for my practice. Phase billing is not widespread in Oregon elder law at this time, but it is coming.

Contingency Fee

When a lawyer signs up to do work on a contingency, he or she takes as a fee a percentage of any recovery from the other side. For contingency to work there has to be an other side and the other side must be capable of paying. Contingency fees are common in the world of personal injury where insurance makes defendants able to pay awards. Contingency is less common in the Oregon elder law world. Some lawyers will do a financial elder abuse case on a contingency if it is a strong case and the alleged abuser has a lot of money. Some lawyers will take a will contest--a case in which a will is challenged as being obtained by fraud or undue influence--on a contingency. This is about it for contingency in the elder law and probate world.

Costs and Expenses.

In addition to lawyers fees you must be aware of costs and expenses. The client is responsible for court filing fees, publications fees, fees for personal service on certain parties, other court costs, and the costs of experts, if necessary. Costs can be significant, and you should discuss them with the lawyer at the outset.

Lawyers Overhead

In addition to lawyers fees, some lawyers charge the time for legal assistants, copying and postage. These kind of charges vary a lot from lawyer to lawyer and you should discuss them ahead of time. I have a large corporate client that strictly prohibits these kind of charges on the theory that they are attempts to transfer normal overhead to the client. I think the theory is a good one, although it severely limits my ability to pay my assistant twenty dollars and hour and bill her services at a hundred, thereby pulling down a nice eighty bucks an hour for doing nothing. If your lawyer is at the top range of hourly rates for your vicinity and is also charging you for a lot of overhead, you might want to wander down the road and talk to someone else. There are a million lawyers out there; you can find one that will treat you fairly.

Conclusion

The key to a good relationship with your lawyer is to talk openly about the fees and any concerns you have. You don't want to be in the dark about what your lawyer is going to cost you and no lawyer wants to do work while worrying that he or she will not get paid. When both sides are at ease about the fee issues, both the case and the relationship go a lot better.

5 comments:

  1. I explain the four basic methods of paying lawyers, the role of court costs in the price of litigation, and the way lawyers pass on their business overhead to you. district attorney case management software

    ReplyDelete
  2. This comment has been removed by the author.

    ReplyDelete
  3. This comment has been removed by a blog administrator.

    ReplyDelete
  4. The magnanimous rise in international communications, business relations and travel has led to substantial rise in the number of people seeking legal help in several international issues. plea bargain

    ReplyDelete
  5. Family law disputes range from complex legal battles to the unchallenged officiating of circumstances. Though aspects may be very simple, and be included in all legal service, others can become heated and highly disputed legal battles lasting many months. While the former may be delivered by any qualified lawyer, it's best to invest in the best family law attorney if you are expecting a fight.
    www.divorcelawyersg.com

    ReplyDelete