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Hourly vs Contingency: A Basic Guide to Understanding Attorney Fee Structures

  • May 03, 2019
  • The Harr Law Firm

At Harr Law, we offer several different types of payment plans to help accommodate our clients’ financial needs. When you meet with one of our attorneys, we’ll discuss our billing structure with you, and help you to determine the most effective fee structure for your case and your financial situation. However, it is important that you have a basic understanding of the different types of attorney fee structures, how those are billed, and how they may impact your case. Here is a basic overview of what you need to know.

Types of Attorney Fee Structures

There are two primary types of attorney fee structures—hourly and contingency. As the name implies, an hourly fee structure involves paying your attorney based on the amount of time that he or she puts into your case. However, on a contingency fee structure, you typically do not pay anything upfront; instead, your attorney takes a percentage of the judgment or settlement amount at the end of the case.

Additional fees may be applied to your case, such as court costs, travel expenses, expert testimony fees, and so on. However, these will be discussed with your attorney as you review your case. Here’s a bit more on hourly and contingency fee structures, and how they work.

Hourly Payments

Hourly fee structures are a simple and straightforward way to arrangement payment with your attorney. We will provide you with an estimate of the amount of time that we think we will spend on your case, so that you can have a general idea of the overall cost of working with one of our attorneys. It is important to note that hourly fees can vary from one client to another. This will be based on the complexity of your case, among other influencing factors.

The benefit of paying on an hourly fee structure is that you are only paying for the amount of work that your attorney is putting into the case. If your case is settled very quickly, you could end up paying a rather small amount for your attorney. However, if your case ends up dragging on for quite some time, you may end up paying more than you had hoped.

Contingency Fees

As mentioned above, a contingency-based payment plan means that you do not pay any upfront costs for your attorney. Instead, when you contract with us, we will establish an agreeable percentage that we will collect from your settlement or judgment amount after your case is completed.

Obviously, this offers you several clear benefits. First, you do not have to produce any upfront funds to secure an attorney. This is often very important for our clients who are relying on the windfall from their court case to make ends meet. Additionally, if you lose your case for any reason, you don’t typically owe your attorney anything. (There may be some expenses that you’ll need to cover, but you should not be charged for your attorney’s time.)

Now, you may be wondering why we—or any attorney, for that matter—would accept a case based on contingency payments. Obviously, such a payment structure does come with a bit of a risk for us, as the attorney; we run the risk of putting time and effort into a case, and not receiving any payment for it. However, contingency fee structures usually offer a higher payout than hourly fees, if the case is successful. So, though it comes with a small risk, we are willing to take on contingency-based cases because we are confident in our ability to win your case and help you receive the settlement or judgment you deserve.

Other Fee Considerations

While the two fee structures mentioned above are the most common, basic forms of payment when working with an attorney, there are other fees that you should be aware of. As mentioned earlier, you may be responsible for certain expenses relating to your case. We will discuss these fees with you upfront; in many contingency-based cases, we will discuss whether your fees will be included before or after our percentage of the settlement is calculated.

Another common type of payment individuals make to their attorneys is a retainer fee. This is an upfront, lump sum paid to the attorney to secure the attorney-client relationship. Essentially, it is a down payment on your lawyer’s services. The attorney uses this retainer for those previously mentioned expenses. A retainer fee may be included for either an hourly or contingency-based fee structure.

Contact us today to discuss your case, and to learn more about our flexible fee structures and payment plans.