How does a lawyer/attorney bill?

When I was in law school, we had this running joke that after law school we will live our lives in 6-minute increments. Why 6 minutes? Because that is the minimum amount of time an attorney can bill you for, doesn't matter how long it took to do a particular task, they will still bill you (at a minimum) for 6 minutes.

There are a few ways that an attorney can bill you. In this blog post, I will explore some of the most common ways.

  1. Flat fee- the attorney you hire says I will bill $x to provide services. The attorney is essentially saying I don't care how much time these services will take, I will bill you for them at a flat rate. This is common for uncontested divorces (meaning both parties want a divorce and there are typically no assets or children involved) and Driving Under the Influence (DUIs).

    • pros: you know the cost upfront and there are no surprise bills at the end of the case.

    • cons: you might feel cheated since for the attorney these types of cases are routine so they have practice when them and it will take them significantly less time to do than a complex case. Then again, it took the attorney time to learn how to handle these cases in a fast and efficient way.

  2. Contingency fee- the attorney you hire says, do not give me money now, I will take up to x% out of your settlement (every state is different in how much an attorney can take out of your settlement, typically it is up to 33%+ expenses). The attorney is essentially saying I am willing to put in all this work for free if we lose, but if we win I want a cut of the winning. This is common for Personal Injury cases and insurance cases.

    • It is important to note that in many states this fee structure is not allowed for family matters (such as divorce and child custody) and criminal cases. It has to do with the ethical obligations of the attorney.

    • pros: if you lose the case, at least you didn't have to pay legal fees

    • cons: you expected to get a certain amount, and after taxes (some settlements are subject to tax), legal fees, and expenses you get significantly less money than you expected.

  3. Hourly fee- the attorney you hire says, I will bill you $x per hour. What they typically do not tell you is that a legal hour and an actual hour are very different. A legal hour is 10 increments of 6 minutes. So for example, the attorney wrote an email to you, it took the attorney 3 minutes to write it, you will be billed for 0.1 hours (which is a fancy way of saying 6 minutes). This is the most common fee arrangement.

    • pros: if you want to hire someone to be your attorney but the work might vary month to month or week to week or the case is very complex and it is hard to estimate the workload it will require.

    • cons: can become very expensive, very fast.