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- 1). Explain that a retainer fee is money payable by the client at the beginning of engaging the attorney's services. Generally, the attorney's hourly rate is deducted from the retainer fee and a statement is provided to the client on a periodic basis accounting for the retainer. Some retainer fees, however, are engagement fees with hourly attorney billing occurring afterward.
- 2). Tell a client that a fixed fee is just as it would suggest: a one-time payment for legal services on a matter. Clarification should be made as to whether a flat fee includes the costs of legal expenses associated with the legal services rendered. This type of fee is usually provided for drafting wills or simple real estate transactions.
- 3). Demystify the billable hours fee model by first disclosing the attorney hourly rate. The billable hours fee structure is when an attorney calculates a client bill on a periodic basis, usually monthly, by multiplying his hourly rate times the amount of time spent on the client's matter during the applicable billing period. The legal profession has reported an increasing concern with the billable hours model.
- 4). Make clear that the contingent fee is based on the attorney being paid only if the attorney obtains a monetary recovery for the client. This is the typical fee model in personal injury cases, and usually involves the attorney receiving a percentage of the client's recovery, such as third, less expenses.
- 5). Make sure that attorney fees are included in the attorney-client contract regardless of the type of fee structure used. This is especially important when a combination of potential attorney fee models are used, or modified contingency fees apply, as these are more apt to create disagreements as to the original intent and understanding of the attorney and client at the time of the fee agreement.
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