Money Matters: How Lawyers Get Paid
There are many different ways to retain and pay for the services of a lawyer. To help you through the legal maze, here is a simple summary of most of them.
Contingent fee. When you have a personal injury, for example a claim arising from an auto accident, the customary arrangement is a contingent fee. The lawyer’s fee comes out of the amount recovered, so you don’t pay unless you win. There are maximums in some categories, such as medical malpractice, but the percentage fees generally vary from 30% to 50% and are subject to negotiation. Defense of claims. When you are a defendant, one of the best ways to pay for a lawyer’s services is through your public liability insurance policy. Legal services are covered in most auto and home insurance policies, although you may not have the right to select the primary attorney. The policies also provide for payment, to the limits of the policy, for judgments or settlements.
Prepaid plans. In the last 30 years, legal prepaid insurance has grown by leaps and bounds. Some plans are developed through trade unions or consumer groups. Other companies, including Montgomery Ward, sell prepaid insurance plans to individuals by direct mail or other means. The American Prepaid Legal Services Institute, in the Chicago office of the American Bar Assn., (312) 988-5752, monitors prepaid plans nationwide. There are many different kinds; most have a monthly or annual fee and include a number of office consultations, perhaps a document preparation, such as a will, and reduced fees for other services.
Lawyer referral services. Many bar associations, including those in Los Angeles and Beverly Hills, provide a referral service. Check the Yellow Pages for the one nearest you, and be sure it is a service that has been certified by the State Bar. Counselors first determine if you really need a lawyer. Many of the calls to the Los Angeles Bar Assn., for instance, are directed to government and consumer agencies that can resolve problems without involving a lawyer. There is no charge for the initial phone call. Lawyers who practice in specific areas and meet minimum requirements are recommended. The charge for the first visit is set in advance. By the way, this idea was started in Los Angeles in 1937.
Legal information by telephone. Telelaw, a legal consulting service, was started last year in Southern California. A $3-per-minute phone charge will appear on your bill. It is a cost-effective way to get basic legal questions answered. Call (900) 446-4529.
Another recent entry is Divorce Helpline for do-it-yourselfers. Phone (800) 359-7004. Telephone help is also available through some prepaid legal plans.
Legal aid. There are several legal-aid offices in this community where free legal services are provided if you meet income-eligibility requirements.
Public defender. A public defender is appointed by the court if the defendant is indigent and charged with a crime. There is no such service in civil cases.
Government lawyers. Federal, state and municipal governments engage lawyers as full- or part-time employees. These offices sometimes answer legal questions.
Basic approach. You can expect to pay a lawyer an hourly fee except in contingent cases. Rates range from about $75 to several hundred dollars. When the scope of the work can be determined in advance, a minimum or maximum fee may sometimes be set. Some businesses pay an annual retainer fee.
Listen to your lawyer and encourage him or her to ask questions and provide options. Clients often propose action that may not be the best way to go. You may request that a lawsuit be filed, for example, when mediation or arbitration should be considered.
It takes consultation time to learn about a client’s needs and to find the appropriate course of action. So, although answering a question or doing what the client requests may be sufficient, many lawyers properly strive to explore client objectives and review alternatives. This takes time and judgment and is usually worth the money.
