Understanding Legal Fees

    When Katherine Buckley decided she wanted a divorce, she began her search for a divorce lawyer without any knowledge of legal fees. This was a huge mistake. “I was scared. I didn’t have a ton of money and I didn’t know how I was going to pay for an attorney. I didn’t even know how much an attorney was going to cost me. The whole process was just devastating,” Buckley said.  

Buckley’s anxiety could have been lessened if she had a better understanding of legal fees and knew what to expect when she began knocking on the doors of law firms in her hometown. According to Heidi Culbertson, director of client development at The Harris Law Firm in Denver, legal fees come in a myriad of forms.

Two legal fees commonly used at The Harris Law Firm are the consult fee and retainer fee. The consult fee is charged when a potential client requests a consultation from a lawyer. This can be charged as a flat fee or an hourly rate. Either way, the client is required to pay the fee even if the lawyer tells them they don’t have a case or they decide not to use the lawyer.  

A retainer fee is an upfront fee that secures payment for hourly legal fees in advance. In some cases, Culbertson said, the fee may need to be replenished once it is used up. This depends mainly on the relationship between the client and the lawyer and the firm’s payment policy.

Buckley was not subjected to a consult fee, but she did have to pay a retainer. During her consultation, her lawyer offered her two payment options, she said. The first option was to pay an hourly fee of $100. The fee was to be charged at minimum billing increments of every quarter-hour.

Her second option was to pay a lump sum of $3,000 upfront regardless of how little or much time the case required. Scared of racking up an enormous bill, Buckley chose for the second option. “I didn’t know where I was going to get the money, but it seemed like the best option at the time,” she said. “I was a nervous wreck.”

According to Culbertson, law firms generally accept payment in the form of check, credit card or cash. Buckley borrowed the money from a friend. Her fear of legal fees was immediately put at ease. However, looking back she believes she could have saved money by paying the hourly rate because she and her ex-husband ultimately settled their case out of court.  

Culbertson confirms that avoiding litigation is the single best way to reduce legal fees. “If the parties are willing to negotiate, compromise and agree, the costs can be reasonable. If they decide to litigate, the costs can be considerable,” she said. “Keep emotions in check and work toward a respectful settlement to avoid litigation.”  

In all, Culbertson said the monetary cost of a divorce could range from $2,500 to $10,000. Ultimately, the price tag is dependent almost entirely on the parties involved in the case. Buckley’s divorce totaled her $3,000 plus additional expenses. She and her ex-husband started out facing litigation, but after several months of discovery proceedings and arguing, the two were able to agree on a settlement. The brunt of the couple’s disagreement revolved around their daughter and who would retain physical custody.
 
When they agreed to seek the assistance of a mediator to work up a custody agreement, they came across more fees. Buckley paid $90 for the two-hour session. Her ex-husband also paid an additional $90 for the services.  Today, Buckley has shared custody of her daughter with her ex-husband.

Reflecting on her divorce, Buckley said if she had it to do again, she would have taken the time to research lawyers and what types of legal fees they charged. Not understanding her options and the legal fee lingo left her hiring the first lawyer she had a consultation with. “I just wanted to get it over with and that’s not how I should have gone about it,” she said. “The truth is I lost out, my daughter lost out, all because I was scared of those legal fees.” 

Legal Fees and other Definitions

Casey Clark Ney is a freelance journalist based in Boise, ID. She holds a B.A. in Communication and has more than six years experience in newspaper writing. Her Web site can be viewed at www.CaseyClarkNey.com.