Law Firm Compensation

Quick Guide to Law Firm Compensation

How do Lawyers Charge for their Services?

Law firm compensation can be paid in a variety of ways, and lawyers will require different fee arrangements depending on the type of case, the years of experience they have, and the location of the law offices.

For example, law firm compensation is likely to be paid based upon an hourly rate if you are involved in a case similar to a divorce. Or, another example includes law firm compensation being based on a contingency fee during a personal injury case. These examples are expanded and explained below:

Hourly Rates

Hourly rates are the most common type of law firm compensation, and the lawyer will be paid for every hour of service they put into your case. Most lawyers will break down an hour into increments as well, but it’s illegal for an attorney to charge multiple clients for the same hour.

By expanding on the divorce example, most law firm compensation for a divorce is charged based upon an hourly rate. Most times, the lawyer will work place their right to compensation within the divorce settlement, and the legal document will specify which party will be responsible for the fees.

Hourly rates are usually paid throughout the litigation process or in incremental payments after the lawsuit has ended. You’ll want to refer to the section later in this article for national average hourly rates by region.

Contingency Fees

While expanding on the personal injury example, most lawyers will charge a contingency fee in cases such as medical malpractice, personal injury cases, and debt collection cases. A contingency usually allows a lawyer to charge about one-third of the final settlement if the plaintiff receives compensation.

If the lawyer doesn’t win the case, the plaintiff won’t have to pay the lawyer a contingency fee. However, if a plaintiff is involved in a contingency case and loses the case, they may still be responsible for the attorney fees of the defendant.

Flat Fees

Law firm compensation usually comes in a flat fee if the legal service is simple and takes little time to complete. Common types of legal services that are usually paid for in flat fees include wills, uncontested divorces, and certain types of bankruptcy.

Flat fees are usually paid at the beginning of the service, and a client may have to pay additional fees for filing certain documents.

Retainer Fee

Retainer fees are usually an advanced payment for estimated costs associated with collective or partial hourly law firm compensation. If a lawyer allows retainer fees, a client may choose to pay a larger sum of money which the lawyer will then put into a trust account. The lawyer will withdraw funds from the trust account for every hour of service they then provide, and they can also withdraw funds for services such as filing fees and modifications.

As a client, retainer fees are an easy way to not worry about expenses. However, you should always ask your lawyer for billing statements throughout the legal service. Most retainer fees are nonrefundable if a client drops the case, but a client may obtain prior retainer payments if a court demands the measure.

Average Hourly Rates Across United States Regions

Law firm compensation in the form of an hourly rate is likely to fluctuate depending on the state and region you live in. If you live in a rural area, you’re likely to pay less law firm compensation than a client living in a large metropolis area. The hourly rate will also depend on the type of law and years of experience of your lawyer. It’s not always advisable to correlate the skills of an attorney with the amount they charge per hour, but as a general rule of thumb, better lawyers will charge more for the law firm compensation.

A study done by the National Consumer Law Center from 2010 to 2011 determined the average hourly rates for lawyers and paralegals in large and small firms within specific regions of the United States. The results of the study are as follows and can be found on the official website of the National Consumer Law Center:

Atlantic Region (D.C., DE, NC, NJ, PA, VA, and WV)

Lawyer in small firm: $350

Lawyer in large firm: $342

Paralegal in small firm: $128

Paralegal in large firm: $130

California Region

Lawyer in small firm: $350

Lawyer in large firm: $453

Paralegal in small firm: $121

Paralegal in large firm: $153

Florida Region

Lawyer in small firm: $312

Lawyer in large firm: $340

Paralegal in small firm: $102

Paralegal in large firm: $96

Midwest Region (IA, IL, IN, KS, MI, MN, MO, ND, NE, SD, WI)

Lawyer in small firm: $284

Lawyer in large firm: $381

Paralegal in small firm: $81

Paralegal in large firm: $125

New York Region

Lawyer in small firm: $323

Lawyer in large firm: $309

Paralegal in small firm: $96

Paralegal in large firm: 110

Northeast Region (CT, MA, MD, ME, NH, RI, VT)

Lawyer in small firm: $285

Lawyer in large firm: $382

Paralegal in small firm: $95

Paralegal in large firm: $130

Ohio Region

Lawyer in small firm: $258

Lawyer in large firm: $282

Paralegal in small firm: $90

Paralegal in large firm: $102

Pacific Region (AK, HI, OR, WA)

Lawyer in small firm: $281

Lawyer in large firm: $356

Paralegal in small firm: $105

Paralegal in large firm: $107

South Region (AL, AR, GA, KY, LA, MS, OK, SC, TN)

Lawyer in small firm: $265

Lawyer in large firm: $283

Paralegal in small firm: $85

Paralegal in large firm: $102

Texas Region

Lawyer in small firm: $319

Lawyer in large firm: $327

Paralegal in small firm: $77

Paralegal in large firm: $87

West Region (AZ, CO, ID, MT, NM, NV, UT, WY)

Lawyer in small firm: $300

Lawyer in large firm: $230

Paralegal in small firm: $94

Paralegal in large firm: $75

*Note: Some of the law firm compensation in hourly rates may be slightly flawed within the tables listed above because of the lack of participating lawyer in a certain region. However, the data provided by the National Consumer Law Center is some of the most accurate data available at this point.

Can I Receive Free Service from a Lawyer?

In some cases, you will be charged no law firm compensation. These types of cases usually include public defense and Pro Bono work. Additionally, a person with low means to income can usually receive discounted services for cases involving divorce or landlord violations. You’ll have to contact your Pro Bono referral service in your area to see if you qualify to waive the law firm compensation.