ohiolandlord
04-20-2006, 08:24 PM
I. Attorney Fees
There are two ways that attorneys make money. The first is by clients who pay by the hour for work that is done. The second is a contingent fee arrangement, wherein the lawyer takes a percentage of what you win.
A. Contingent Fee Arrangements
Because of the prevalence of commercials by personal injury attorneys, many people are under the misconception that employment law attorneys will take their case on only a percentage of whatever the attorney collects as a result of a settlement or judgment. This type of arrangement is called a strict contingency arrangement.
On some occasions, employment lawyers will take a case on a strict contingency basis and not require a retainer fee. Employment attorneys will generally only do so if the case is very strong as to both liability, damages, and the employer’s post judgment ability to pay damages. In other words, strong evidence exists to support that the employer has broken the law, and the damages for this liability are great. Very few cases are strong enough to justify a strict contingency arrangement. Despite what you may believe, your case is probably not strong enough to justify a strict contingency arrangement. Be prepared to pay the attorney a retainer fee.
The retainer fee paid as part of a contingency fee arrangement may or may not be refundable when a recovery is obtained; this depends upon the attorney and will usually be set forth in the attorney client agreement. The retainer fee for the attorney is generally separate from other expenses in the lawsuit including filing fees, witness fees, deposition costs, copying fees, etc. Don't make the mistake and ***ume that once you pay the retainer fee that you will have no other expenses in the lawsuit.
B. Paying by the Hour
In some situations, the client pay the attorney for each hour he works. This is usually done through what is called a retainer. A retainer is an amount of money paid by the client to the attorney at the start of the case. The retainer fee could range anywhere from a few thousand dollars to more than $10,000. Once that amount is paid to the attorney, the attorney deposits the money into a special account and leaves it there until he does work on the case.
If the attorney is working for $150.00 per hour, and works for three hours on your case, at the end of the day, the attorney will write himself a check from the special account containing your money in the amount of $450.00. As the hours worked pile up, money in the account gets low, and it will be necessary for the client to put more money in the account down the road.
C. Comparing the Two Methods
Contingent fee arrangements and hourly fee arrangements have their pros and cons. Here is the problem by way of example:
Joe Smith works for a grocery store as a cashier. One day, a new boss comes in and says “The first thing that I am going to do is fire all the (insert racist derogatory term here) in this place” and then does so, firing Joe, who is black. Unfortunately for the boss, and fortunately for Joe, a local news team just happened to be setting up its cameras to do a story on the new state-of-the-art dairy section which had just been installed at the grocery store and the microphones were open and recorded the remark. Joe gets a copy of the tape and heads for his lawyer’s office.
Now Joe must make the decision on how to pay the attorney. Should he sign a contingent fee agreement, or give the attorney money up front to pay by the hour? Joe goes for the contingent fee agreement. The attorney calls up the store and speaks to their corporate counsel. The attorney plays the tape for the guy over the phone. Line four at the corporate counsel’s office rings and the secretary says that it’s channel five news calling for comment about this discriminatory remark made by the supervisor.
The store’s corporate counsel asks Joe’s attorney if his client will settle for $50,000. Joe’s attorney is scandalized and says that he would not consider any offer under $100,000. “Done!” says the corporate attorney and the matter is concluded later that afternoon with a courier bringing a bank check for $100,000 over to Joe’s attorney’s office.
The attorney just made $33,333.33 for about 27 minutes of work. This is money that Joe won’t get. Had Joe agreed to pay the attorney by the hour, Joe would have had to write a check for $2,500.00, and since most retainers are refundable if unused by the end of the case, he would have gotten almost all of it back. Now how good does the contingent fee agreement look? However, if the employer decided to fight the case and Joe's attorney spent several hundred hours on the case, a contingency fee arrangement would seem more appropriate.
II. Initial Consultation
Prior to accepting your case, the attorney will often require at least an initial consultation with you, the potential client. This is to size you up as a client and to make a determination on what your case is worth and how best you should pay for it. The employment law attorney will often charge for the initial consultation. After all, you are taking his or her time. That time could be devoted to other matters that are being billed
continue article
www.ruzicholaw.com/books.html
There are two ways that attorneys make money. The first is by clients who pay by the hour for work that is done. The second is a contingent fee arrangement, wherein the lawyer takes a percentage of what you win.
A. Contingent Fee Arrangements
Because of the prevalence of commercials by personal injury attorneys, many people are under the misconception that employment law attorneys will take their case on only a percentage of whatever the attorney collects as a result of a settlement or judgment. This type of arrangement is called a strict contingency arrangement.
On some occasions, employment lawyers will take a case on a strict contingency basis and not require a retainer fee. Employment attorneys will generally only do so if the case is very strong as to both liability, damages, and the employer’s post judgment ability to pay damages. In other words, strong evidence exists to support that the employer has broken the law, and the damages for this liability are great. Very few cases are strong enough to justify a strict contingency arrangement. Despite what you may believe, your case is probably not strong enough to justify a strict contingency arrangement. Be prepared to pay the attorney a retainer fee.
The retainer fee paid as part of a contingency fee arrangement may or may not be refundable when a recovery is obtained; this depends upon the attorney and will usually be set forth in the attorney client agreement. The retainer fee for the attorney is generally separate from other expenses in the lawsuit including filing fees, witness fees, deposition costs, copying fees, etc. Don't make the mistake and ***ume that once you pay the retainer fee that you will have no other expenses in the lawsuit.
B. Paying by the Hour
In some situations, the client pay the attorney for each hour he works. This is usually done through what is called a retainer. A retainer is an amount of money paid by the client to the attorney at the start of the case. The retainer fee could range anywhere from a few thousand dollars to more than $10,000. Once that amount is paid to the attorney, the attorney deposits the money into a special account and leaves it there until he does work on the case.
If the attorney is working for $150.00 per hour, and works for three hours on your case, at the end of the day, the attorney will write himself a check from the special account containing your money in the amount of $450.00. As the hours worked pile up, money in the account gets low, and it will be necessary for the client to put more money in the account down the road.
C. Comparing the Two Methods
Contingent fee arrangements and hourly fee arrangements have their pros and cons. Here is the problem by way of example:
Joe Smith works for a grocery store as a cashier. One day, a new boss comes in and says “The first thing that I am going to do is fire all the (insert racist derogatory term here) in this place” and then does so, firing Joe, who is black. Unfortunately for the boss, and fortunately for Joe, a local news team just happened to be setting up its cameras to do a story on the new state-of-the-art dairy section which had just been installed at the grocery store and the microphones were open and recorded the remark. Joe gets a copy of the tape and heads for his lawyer’s office.
Now Joe must make the decision on how to pay the attorney. Should he sign a contingent fee agreement, or give the attorney money up front to pay by the hour? Joe goes for the contingent fee agreement. The attorney calls up the store and speaks to their corporate counsel. The attorney plays the tape for the guy over the phone. Line four at the corporate counsel’s office rings and the secretary says that it’s channel five news calling for comment about this discriminatory remark made by the supervisor.
The store’s corporate counsel asks Joe’s attorney if his client will settle for $50,000. Joe’s attorney is scandalized and says that he would not consider any offer under $100,000. “Done!” says the corporate attorney and the matter is concluded later that afternoon with a courier bringing a bank check for $100,000 over to Joe’s attorney’s office.
The attorney just made $33,333.33 for about 27 minutes of work. This is money that Joe won’t get. Had Joe agreed to pay the attorney by the hour, Joe would have had to write a check for $2,500.00, and since most retainers are refundable if unused by the end of the case, he would have gotten almost all of it back. Now how good does the contingent fee agreement look? However, if the employer decided to fight the case and Joe's attorney spent several hundred hours on the case, a contingency fee arrangement would seem more appropriate.
II. Initial Consultation
Prior to accepting your case, the attorney will often require at least an initial consultation with you, the potential client. This is to size you up as a client and to make a determination on what your case is worth and how best you should pay for it. The employment law attorney will often charge for the initial consultation. After all, you are taking his or her time. That time could be devoted to other matters that are being billed
continue article
www.ruzicholaw.com/books.html