“GIVE ME AN ESTIMATE.”

“CAN WE DO THE CASE ON CONTINGENCY?”

During our initial consultations, most people want to know how much a lawyer will cost for their dispute or lawsuit. Unfortunately, the answer is usually an unsatisfying: “It depends.” Considering the varying degree of outcomes that occur in various types of disputes — some come to us ready for early settlement/resolution while others are fought all the way to trial — it’s always difficult to predict with consistency. Below are some pointers for potential clients to consider before making the decision to engage legal services.

1. ANALYZE THE SITUATION. WHAT ARE YOUR DAMAGES?

Only you can determine for yourself if you believe the legal services you are seeking are worth the investment. Part of your analysis should include the questions: “What is the relief I am seeking?” “What are my damages?” “What happens if I don’t fight?” “What type of person am I?”

THE PRINCIPLED LITIGANT

Some people are willing to litigate over small amounts of damages because they are not going to back down when being bullied by the person suing them, i.e., that nasty neighbor, that terrible business partner, or that disrespectful contractor. An example we commonly see is the situation where the client spent something like $100k on a contractor who did a terrible job on a home renovation project, and the contractor is now suing the homeowner for something like $3,000 in “amounts owed.” The homeowner had a terrible time with that contractor, and has to now spend tens of thousands of dollars on a new contractor to re-do shoddy workmanship. In these cases, we often see the client come to us unwilling to spend just $3,000 to resolve the dispute. To them, they are being bullied and/or extorted for more cash, and they’d rather fight over principle than pay someone off. And often, it is the right thing to do because that person could keep asking for more money down the road and change their demands. Sometimes it is worth fighting over principle and for legal finality with a dispute of this nature. But be prepared to spend more on legal fees than you will win in damages, unless you have significant counterclaims.

THE COST-BENEFIT ANALYSIS LITIGANT

On the flip side, some people only want to spend the money on legal fees if the damages they seek outweighs the amount of legal fees. This type of client will only hire us if they think their damages are, or example, $200,000, and although they know it could cost $100,000 in legal fees, they are happy that the math works out with them getting something at the end. However, do not assume you will get your attorneys fees reimbursed by the court. Ask us first. Many people think they can get their attorneys fees reimbursed once they win the trial, which is not typically the case.

THE “I HAVE NO CHOICE” LITIGANT

Finally, many people have no choice but to hire a lawyer because they are a defendant in a lawsuit and have no liability insurance coverage. They face the cost-benefit analysis of working their own case without legal counsel to save money, but with a greater risk of losing the case and facing a money judgment versus spending the money on legal representation to have a better chance of reducing a potential judgment or winning altogether.

2. WHAT TO EXPECT WITH LEGAL FEES

Our firm—and most other litigation firms—primarily operates off of refundable retainers known as evergreen retainers. What that means is, if you come to us with a dispute that is either pre-litigation, or will materialize into court litigation, we require a certain amount to be deposited into the client trust account to bill against as we begin working the case. This typically ranges from $3,500 for smaller pre-litigation disputes, up through $10,000 for litigation. Some types of complex cases might warrant an even higher deposit: for example, we have requested retainers of up to $20,000 for larger/more complex matters.

When we are dedicating full firm resources (multiple salaried personnel, and paying client expenses) to your case in a heated litigation matter, the retainer helps us pay costs/expenses, such as to expert witnesses, and stay out of the red on our fees in your case. As of the date this page was written, attorney rates at our firm vary from $225/hour through $325/hour. Support staff, such as paralegals, bill at lower rates. We bill on an hourly basis, in .1 hour increments.

Importantly, amounts held in the retainer that are not billed are refundable upon demand or at the end of the representation.

3. CONSIDER YOUR OPTIONS. MAKE AN INFORMED DECISION.

When we tell potential clients that the retainer will be $5,000, for example, on their litigation case, many potential clients will go call other law firms. Some law firms will offer very low retainers to get you in the door. Think, $750, or $1500. Anything lower than us. We recommend you resist the urge to go with the lowest bidder. Carefully consider your experiences as you discuss your case with different firms, consider how the consultation felt, and choose the firm you think will be the best fit for you. If you’re going to spend money on a legal battle or transactional/business matter, it’s important you have the legal team that fits who you are as a client.

No firm is going to work for free. Law firms that take a low retainer may dump you like a hot potato as soon as that retainer is gone, because they will require a new retainer or retainer refill (like we do) once that retainer has depleted, and, if you didn’t read your fee agreement, you may not have expected it. The fee agreement or engagement letter you sign with your law firm should explain to you how the fees work and how the retainers work. It doesn’t necessarily matter how much the initial retainer amount is because no matter what, every law firm, for non-personal injury type cases, is going to be charging you an hourly rate, and once that retainer is expended, the law firm will need you to immediately replenish it.

Getting into a court case only to suddenly realize you can’t afford your lawyer, because the initial retainer was low and you didn’t realize how quickly you’d deplete it to zero, is not a position you want to be in. At Volpe Law, we try very hard to explain how expensive your matter might be and give you realistic expectations before you commit. Please ask these questions before signing on the dotted line.

4. CAN THE LAWYER ESTIMATE HOW MUCH THE LEGAL REPRESENTATION WILL COST THE CLIENT?

Not usually. When you come to our firm with a dispute, whether it is a contract dispute, a real estate dispute, or construction dispute, we attempt to resolve it through demands and negotiations first. If we can resolve it outside of court, that would typically be the most efficient/cost effective outcome for the client.

Why can’t we answer this question? Well, first, we have no idea how long it will take and how many hours we will have to put in to resolve your dispute. This is primarily because we cannot predict how the other side will react. If the other side puts up a fight, then we have to defend you. That takes more time. If the documentary evidence in the case involves thousands of pages, we have to review that to analyze how to defeat your opponent. That takes time.

In general, factors that drive cost include:

• The value of the case (damages);
• The number of parties in the case;
• The amount of fact information to evaluate;
• The amount of discovery needed to find that factual information;
• How stubborn and litigious the other parties are; and
• Whether the case will go to trial or not

We can estimate some transactional type matters if we have a very clear scope from you, i.e., you want us to review a 50 page contract and spend an hour discussing the risks with you. That type of thing is easier to estimate. But an open-ended dispute with potential for protracted litigation? Not easy to estimate. Talk to your lawyer about ways to cut costs in litigation. There are some strategies that can be employed, such as attempting to limit discovery, or aggressive early mediation, that can potentially help get you through the case with less expenditure.[1]

5. DO FIRMS OFFER FLAT-FEES FOR MINOR TRANSACTIONAL NEEDS?

Yes! Many firms, including Volpe Law LLC, take on small transactional jobs for clients, which involve far less variability and thus can be billed at a flat rate rather than by retainer. If the client knows exactly what they need/want, a flat fee is easier to quote. If the scope is more open-ended, e.g., “review my contract, tell me the risks, then negotiate with the other party”, it becomes more difficult to assign a flat fee and we just work off retainer.

Examples of minor transactional jobs we handle include:

• Contract Review;
• Contract Drafting;
• General Counsel for Businesses;

These types of matters are very enjoyable for our firm because we are counseling the client, giving legal advice, and helping the client accomplish a personal or business transaction within the confines of the law. And, it doesn’t cost the client an extraordinary amount of money. Feel free to ask us how long you think the project will take and we can try our best to answer, and in some cases, just quote a flat fee.

6. WHAT ABOUT PAID CONSULTATIONS WITH A LAWYER?

Sometimes a client comes to us and doesn’t know exactly what they need or want. In those instances, we can offer paid consultations and/or second opinions. Typically, a paid consultation provides:

• Our analysis of the law as applied to the facts of your case;
• A memo of explanation regarding next steps; and
• How we believe your case “holds up” or will “hold up” in front of a judge.

The reason why these consultations are paid is because our attorneys/support staff will have put multiple hours of their time into preparing, and that time must be compensated (or else the firm would go out of business).

In the worst-case scenario, we might determine that a client does not have a good case. If this occurs, we will tell the client, sometimes with a detailed memo, and refund any money left from the retainer. Importantly, spending some money up front on a legal memorandum from a lawyer – if it reveals a client has a poor chance of success in litigation – could save that client tens of thousands of wasted dollars down the road. It is worth it to hear the “bad facts” as soon as possible.

7. HOW CAN I AFFORD A LAWYER THEN WHEN I REALLY NEED ONE?

There are a few options we can think of:

• First, direct pay with check/cash. Not realistic for many people.
• Second, credit cards. The downside is interest. The upside is when we’re done with your case, you’ll have enough credit card points for a vacation.
• Third, retainer loans. We do have a retainer loan program through LawPay, our credit card processing vendor. It lets you break up payments into a 6, 12, or 18 month payment plan.
• Fourth, monthly payment plans with us.
• Fifth, other financing options, such as borrowing against your home equity, personal loans, etc.
• Sixth, crowdfunding and help from family.

While we endeavor to provide as many methods of payment as is ethical and possible, only you can decide which option is best for you and your family or business!

CONCLUSION

Legal services cost money. Law Firms invest heavily in running a business that provides quality services to their clients. If you have a legal need and have decided there is value in spending money on legal representation, we are happy to take your call to determine how we can help. If you are not sure, you can call anyway and we’ll spend 20 minutes with you in a free consultation to help you determine whether you’re ready to take the next step. You may request a consultation by calling 303-268-2867 or completing a consultation request form.

[1] Getting you through trial in a county court case with limited discovery might cost $25,000 for example, while getting you through trial in a large complex district court case with large damages at stake, expert witnesses, and multiple parties, with lots of discovery, could cost around $150,000-$200,000. These are ballpark figures though, and are in no way inclusive of all possibilities.

DISCLAIMER

The information contained on this website is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter.  Laws frequently change and therefore this content is not necessarily up to date, nor comprehensive. Contact us or another attorney with any legal questions specific to your matter. You may request a consultation by calling us as 303-268-2867 or completing a consultation request form.