How Do Attorneys Get Paid?
Attorneys get paid in a variety of ways, depending on the particular circumstances of the legal matter. For example, suppose Sally Doe was arrested and charged with forgery and obstruction of law enforcement. Sally visits a lawyer and explains her predicament. The lawyer tells Sally that she will represent her for a “flat fee,” or one lump sum of money paid in advance of the representation.
According to the Supreme Court of Georgia, “[a] ‘flat’ or ‘fixed’ fee is one charged by an attorney to perform a task to completion, for example, to draw a contract, prepare a will, or represent the client in court, as in an uncontested divorce or a criminal case.” Formal Advisory Opinion No. 91-2, September 20, 1991, State Bar of Georgia, issued by the Supreme Court of Georgia. So, in Sally’s case, the flat fee would cover legal services provided by the lawyer to perform the task of representing her in the criminal case to completion. At the outset, Sally and her lawyer would come to an agreement on the meaning of “completion” with respect to her particular case and would include that agreement in their written attorney-client contract.
A retainer is something altogether different. “A retainer is… the fee which the client pays when he retains the attorney to act for him, and thereby prevents him from acting for his adversary.” Formal Advisory Opinion No. 91-2, September 20, 1991, State Bar of Georgia, issued by the Supreme Court of Georgia, citing Black’s Law Dictionary (5th ed. 1979). “Thus, retainer fees are earned by the attorney by agreeing to be ‘on call’ for the client and by not accepting employment from the client’s adversaries. McNulty, George & Hall v. Pruden, 62 Ga. 135, 141 (1878).
Still another type of attorney’s fee is a contingent fee. “Contingent” means “depending on something else that might or might not happen.” Merriam-Webster Dictionary, 2014. The most common type of contingent fee case is a personal injury case. Suppose that John Doe is injured in a car wreck that was not his fault. John’s injuries cause him to lose his job. He has no money to pay a retainer or flat fee. A lawyer may represent John for a contingent fee, the contingency being that the lawyer helps John recover some amount of money. In other words, if no money is recovered, the contingency never occurs, so John is not responsible for paying the lawyer any amount of money as an attorney’s fee. In Georgia, not all cases can be handled on a contingent fee basis, and expenses may have to be reimbursed to the lawyer even if no recovery is made.
Another type of attorney’s fee is a “prepaid fee.” A prepaid fee is a fee paid by the client with the understanding that the attorney will earn the fee as he or she performs the task agreed upon, such as preparing a will or estate plan.
Yet another way that attorneys get paid is an hourly fee. In some cases, attorneys get paid for the time they spend working on the case or legal matter. For example, a lawyer in a divorce case may work by the hour and require an initial deposit to be kept in the lawyer’s trust account until the fee has been earned. Once deposited, that money would remain the property of the client until the attorney performs the task agreed upon, at which time the money would be paid to the attorney. The client’s obligation would be to replenish the fund to the original level.
Regardless of the form of attorney’s fee, clients should always understand what services are covered by the fee and what services are not covered. It is always important to have a written agreement to minimize the risk of misunderstanding or miscommunication.