6 Types Of Legal Fee Arrangements

Most people are said to shy away from using a lawyer’s services because they believe they’re beyond their league and financial capabilities.

But when one understands what legal representation entails and how most legal fees are structured, it becomes easy for clients like you to decide on a working arrangement that suits you. Moreover, Getting legal help seems no longer out of reach if helpful information is available.

Like other working professionals, licensed attorneys bill their clientele for their legal services. Different law practitioners and firms impose various legal fees and payment structures. Below are some of the most common types of legal fee arrangements that most in the legal practice follow you should know about:

  1. Consultation Fee

One of the primary legal fees is the consultation fee. It’s the fee a lawyer will charge you for the initial consultation regarding a legal matter. The price may be fixed or charged at an hourly rate. Some attorneys, however, offer a free consultation for personal injury cases and the like.

Lawyers charge consultation fees to determine how seriously you want to avail yourself of their representation and find out if you’re able to pay further expenses. They also use consultation fees as immediate payment for their expertise and time spent during the meeting to discuss your legal predicament – knowing that you may decide not to work with them.

  1. Contingency Fee

A contingency fee is the lawyer’s fee calculated at an agreed percentage of the awarded judgment.  It’s primarily used in personal injury cases. You won’t pay your attorney upfront to handle your case in such an arrangement. Instead, they’ll subtract the fees and costs of the case from the compensation you’ll receive upon resolving your case in a court of law.

If you lose the case, your lawyer will either get nothing, or you’ll be required to shoulder only the expenses entailed during the hearing of your case. It’s said that a contingency fee arrangement is highly favorable, especially in instances where you couldn’t afford to launch a legal suit.

A contingency fee is usually charged at a rate of 33%. Still, it can vary depending on certain factors like the amount at stake, how long a matter takes to be finalized, if there’s a settlement before trial, or if the case is appealed. Some courts, nonetheless, set the amount of contingency fee a legal representative will receive.

  1. Flat Fee

Lawyers usually charge flat fees for uncomplicated routine services like preparing wills, power of attorney, and uncontested divorce cases. Legal experts who handle large volumes of a certain kind of service also charge a flat rate because they use standardized practices to process them.

  1. Retainer Fee

A retainer is an amount of money paid in a lump sum to a lawyer upfront. It’s usually a deposit made and kept in a trust account – the amount is equivalent to the projected total a case will cost or for future legal services a client hopes to receive.

If your attorney asks you to pay a retainer fee, the deposited amount is usually subtracted from your account each time you receive legal services from your lawyer. When you pay a retainer, your lawyer will be on call to handle your legal issues as they arise as long as the arrangement exists. Paying a retainer can make you eligible for discounted rates, too, in some situations.

  1. Hourly Rate

The hourly rate is the typical financial agreement that most lawyers use to charge their fees. In this arrangement, your lawyer will calculate their fee depending on the number of hours they put into dealing with your case.

Yet hourly rates will vary depending on the lawyer’s experience, the level of complexity of your case, and the like. For instance, an attorney with vast experience in divorce and child custody will charge a higher rate than one with less experience. On the other hand, a straightforward case will use fewer resources and time; thus, it will likely amount to a lower hourly pay rate.

  1. Referral Fee

If a lawyer feels that a colleague is better placed to represent you and your case in court after an initial consultation, they’ll likely send you their peer’s way. They’ll ask for a fraction of the total fee you pay to the new attorney as a referral fee. Nevertheless, the referral fee must meet specific criteria before it’s deemed valid in the eyes of the law.


Before signing a legal fee arrangement agreement, comb through every section of the document with your attorney and a trusted third party to make sure that you fully understand each line. Ask questions. Regardless of the legal service payment option you choose to settle with your selected lawyer, it’s prudent to have every piece of information in writing. Always have a copy within an arm’s reach in case of future concerns and clarifications.

It’s also important to understand that lawyer’s fees, like the ones mentioned above, don’t include other related costs like court filing fees, postage, and others. So if you’re still in a bind, be open with your attorney and discuss if they offer flexible payment structures that’ll work best with your financial capabilities. There’s a high possibility that they’re down to discuss payment matters with you if you have shown sincerity and resoluteness in seeking their legal help.