Leveraging Legal Fees
Hiring a lawyer can be expensive. And with fixed, contingent, hourly, and retainer fees, the legal process can be bewildering for someone unfamiliar with the law.
To calm all the confusion, CBS Marketwatch Correspondent Betsy Karetnick breaks down the legal course of action, and presents some helpful tips on how to select the right attorney.
"One of the first things people should remember is no one fee fits all cases," says Karetnick. "They can be flexible and negotiated. So people should go into things thinking, Â'This is like shopping for a car, but shopping for a lawyer.Â' Think about negotiating."
If you have some type of personal injury suit, or perhaps something involving age discrimination, Karetnick says you may want to consider a contingent fee. The contingent fee is a percentage of the defendantÂ's reward. On average, she says that entitlement should be in the neighborhood of 33 percent.
But when writing a will, or doing estate planing, you are more likely to be charged a fixed fee.
"Most likely you'll have a flat or fixed fee for things like writing a will. We called across the country to a couple different referral systems to see what it would cost," Says Karetnick.
"In Chicago," she continues, "It might cost you $250 to $500 to write a willÂ…[in] New York, it can cost you from $600 to $3,000."
Then thereÂ's one of the more common legal cases: The divorce. "If you have a divorceÂ…those [flat] fees can also range widely from a simple uncontested divorce in Chicago or Houston, which would be $1,000. Children involved, $2,000. It can rise very, very quickly to $20,000 if you have a custody battle."
Another way to pay is by the hour. This may require a retainer, which is a percentage of the payment up-front.
But when it comes to saving money, Karetnick says negotiation is still your best bet.
"If a lawyer is asking for a third and the case is settled quickly or you think it will, ask if you can give them 25 percent," Karetnick explains.
"Don't waste billable time. People don't realize this, if you call your lawyer, you're on the phone for a couple of hours, they're charging you for that. Make sure you're organized when you do call and have your facts straight and documents straight.
"Remember a written agreement: You have to ask for a written agreement."