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Understanding the Divorce Lawyer's Fees
Reprinted from www.familyeducation.com


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.

Read more on FamilyEducation: http://life.familyeducation.com/divorce/family-law/45548.html#ixzz1nt753vv2