Fee Types:
Attorneys have three basic methods of charging clients for services rendered. Those methods are Hourly, on a contingency basis, or a flat fee for all services rendered in a matter. An additional fee that may be charged is a retainer. Retainers will be discussed separate from these three fee types.
Hourly Fees – Most Common
An hourly attorney is the same as being an hourly employee with a company. If you work 8am – 5pm then you get paid for eight hours of work. Working those eight hours entitles you to be paid a certain sum of money each hour. An attorney bills in a similar manner when they charge an hourly fee. These fees will range depending on various factors such as the complexity of the issues faced in your case, the amount of experience of the attorney, and the overall skill level the attorney can offer. Attorneys may charge in rounded numbers such as 15 minute increments. That means that if they read and respond to an email and it take 20 minutes to do then you will be charge whatever the next increment amount is. In this case that would be 30 minutes. It is up to the individual attorney on how this billing is done and whether the numbers are rounded up or down. It is common practice for an attorney to take a retainer to ensure an hourly billed case can be started successfully.
Contingency Fees
A contingency fee means that an attorney is paid nothing unless he or she recovered money from your adversary. This fee is a percentage of the total award received. In Tennessee, it is a standard percentage of about 1/3 or 33%; however, an attorney may raise or lower this in his or her fee agreement with you. This type of fee is limited to certain types of cases.
Flat Fees
Flat fees are fees that are due regardless of the amount of work that is performed on a matter. These fees are the most predictable for a client because once agreed to the fee will not change unless there are special provisions within the fee agreement. Flat fees are used for matters that are consistent and predictable. If an attorney can fairly easily predict the amount of time it will take to complete your matter then a flat fee will make sense. If there are a lot of unknown issues or concerns then a flat fee is probably not the best method of achieving the goal. Additionally, flat fees are payments to the attorney. There may be additional expenses that must be paid outside of the flat fee.
Retainer
A Retainer is a lump sum of money that an attorney requires to be paid prior to starting work on a case or matter. These funds are typically required for hourly billing. Attorneys will take the retainer and bill hourly out of that retainer until either (i) the retainer is used up and standard invoicing or another retainer must be paid, or (ii) the case is completed and the remaining unused funds should be returned to you. In Tennessee, funds such as retainers are normally kept in a trust account until the attorney earns those funds. It is important to remember that just because the attorney has deposited the check does not mean that he or she is allowed to use it. Your invoices should show how much money the attorney has used and taken from that special trust account. Until the attorney earns that money it still belongs to you!
Expenses
Expenses are fees due for costs other than paying an attorney. These costs can be court fees, filing fees, paying expert testimony, etc. These fees are due by you as the client not the attorney; however, some attorneys will forward these fees for you until an award is received, or simply roll them into your monthly invoice. Your paid retainer can also be used to help offset these additional fees.
What can be covered?
Attorney’s can pay many of the court costs and expert fees for their clients and expect a return later; however, there are some fees that are not acceptable to be paid by attorneys. Living expenses and personal loans are not permitted in Tennessee. Attorney’s are bound by the Tennessee Board of Professional Responsibility (BPR) and Supreme Court rules. These rules set the limits on what can and cannot be paid by attorney’s on behalf of their clients.
Supreme Court Rule 8: Rules of Professional Conduct
Tennessee Board of Professional Responsibility (BPR)
Fee Issues and Disputes
Fee disputes can occur at any time. Invoices should be clear and understandable for you, and fee agreements should be fully explained and described prior to signing. To avoid surprises you should feel confident in your understanding of the what and how in regards to your charges. Have an open communication with your attorney about the charges, and if you’re concerned then contact him or her and ask for an explanation. The first step to resolving an issues it to communicate effectively and timely.
If an attorney is not responding to you, and it has been a reasonable amount of time to expect a response a complaint may be filed with the Tennessee Board of Professional Responsibility (BPR).
Williams Office and Law Firm, PLLC 