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Why Legal Representation Is So Costly
All
lawyers do is talk, right? And don't they say talk is cheap? Not
when there's a Juris Doctorate after the person's name.
Lawyers charge a lot because they usually have high overhead: an
office, a receptionist, a secretary. Someone has to pay for it, and
it won't be the lawyer. Lawyers have at least seven years of
post-high school education (four years of college and three years of
law school). For recent graduates, educational costs could be as
high as $120,000 or more. The lawyer is recouping that investment.
Finally, lawyers charge what the traffic will bear. Put simply,
moneyed clients are ready and willing to pay these high fees, and
there are enough moneyed clients around to keep lawyers from having
to worry about volume. As more attorneys enter the field, billing
practices are beginning to change, and fees are coming down in some
areas. But until that happens in more significant numbers, costs
will remain high. Remember that you will need to pay your lawyer at
the current market rate if you want her to work for you.
How Matrimonial Lawyers Charge
Many lawyers charge an hourly rate and bill you for every hour
worked. If Paula Smith's rate is $350 an hour, and she does 10 hours
of work for you, you'll get a bill for $3,500. It can be pretty
straightforward. If you are hiring your lawyer à la carte, you'll
pay as you go.
Most full-service lawyers, on the other hand, want some payment up
front. This fee is called a retainer. The amount will vary
depending on where you live, your specific case, and the lawyer's
hourly rate. In the New York City area, some matrimonial attorneys
charge as much as a $10,500 to $20,000 retainer. In other states,
some lawyers charge at least $25,000. (That's not the bad news; this
might only get you started! You'll probably spend much more than
this if you have a protracted case.)
After you pay the retainer, your lawyer subtracts her hourly rate
from what you've paid for each hour worked until the case is over or
until she depletes your retainer, whichever happens first. If your
lawyer has used up your retainer, you'll start getting bills. Some
lawyers will want a new retainer; others might simply bill you on a
weekly or monthly basis.
Wait a minute, you might think. Doesn't the hourly billing rate
encourage the lawyer to drag out my case to earn more money?
Although this might seem easy, within the profession it is
considered unethical for a lawyer to deliberately drag out (“churn,”
as lawyers say) a case. Another deterrent is that when a case drags
on, lawyers can lose clients, or clients will not be able to afford
to continue paying. It's possible that the lawyer won't collect
everything he's owed. Whatever he doesn't get paid is written off
and, in effect, reduces his hourly rate. On the other hand, if the
lawyer finishes her work within the amount of time covered by the
retainer, she gets her full hourly rate and comes out ahead.
Does that mean you don't have to pay your bill? No. However, it does
mean if ethics don't stop a lawyer from dragging out a case, the
practical realities of collection will.
In
matrimonial law, it is very hard to predict how much time your
lawyer will have to spend on your case. If you and your spouse have
agreed on everything up front, the lawyer won't have to do much more
than draft the legal documents, make sure you understand them, get
them to the other lawyer, and then, eventually, submit them to the
court. If you or your spouse are at war, a lot of time will be spent
on your case, and you can end up spending an astronomical sum of
money.
Divorce Dictionary
A retainer agreement is a contract signed by an attorney
and client setting forth the billing arrangement to be
instituted between the lawyer and the client.
One
of the most important things to understand as you enter a financial
relationship with your matrimonial attorney is the retainer. If you
do pay one, the first thing you will do is sign a retainer
agreement. Remember, any agreement regarding your retainer must
be in writing and should always provide for a refund if the fees are
not used up.
The
agreement should also stipulate what happens when the retainer is
used up. Will you have to pay another lump sum, or will you be
billed on a monthly or weekly basis? When it comes to your retainer,
make sure that all the ground rules are spelled out first.
A
reputable attorney will not only have no problem putting the
retainer agreement in writing, but also will ask you to take the
agreement home and study it before signing it. You should be invited
to call and ask any questions you have. As eager as you might be to
sign the retainer and write out a check, hold back until you read
the agreement and thoroughly understand what it says.
The Fine Print
At
a minimum, your retainer agreement should establish the amount of
money you are paying up front and should stipulate hourly rates for
the lawyer as well as others who might be assisting in your case,
including paralegals and junior attorneys.
The
agreement should also outline how you will pay for out-of-pocket
expenses such as photocopying, process servers, stenographers, or
court fees. Maybe those expenses will come out of your retainer, or
maybe you'll have to pay them in addition to your retainer. Find out
now.
Red Alert
Never sign any agreement in which you use your house as
collateral.
A
retainer agreement should explain how often you will be billed. Are
you going to get a bill only when the retainer is used up, or will
you be kept informed with a bill each month as the retainer
dwindles?
What happens if you do not pay your bill? Does the lawyer have an
automatic right to abandon your case? Does he or she have an
obligation to work out a payment plan with you? Are you obligated to
guarantee payment with collateral, such as your house? Watch out for
any lawyer who demands security in the form of something you cannot
afford to lose.
Usually, you will be asked to countersign the retainer and send it
back to the lawyer with the retainer check.
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