One of the first questions people ask during a consultation for legal services relates to not only the expense of retaining legal counsel but also how the different billing structures work.

At Mack Law Co., LPA, there are two different ways clients may be billed:

1. An hourly fee with a retainer; and

2. On contingency.

How do these different fee structures work? Read on to learn more about the standard billing practices for legal services.

How does hourly billing for an attorney work?

Attorney Mack has set hourly rates, dependent on the nature of the case, and charges monthly billings for the amount of time spent each month on work related to each case and client.

Time records for each matter are divided into one-tenths (1/10) of an hour; for instance, a task that involves Thirty (30) minutes of legal services is five-tenths (5/10) of an hour. This time (i.e., .5) is multiplied by the hourly rate of the timekeeper (Attorney Mack or any other Mack Law Co., LPA employee) and charged to the client’s monthly bill for that matter.

On monthly invoices, the date, the nature of the work, and the time spent on tasks is recorded.

What is a retainer?

A retainer is a deposit toward future legal fees and expenditures. This deposit shows a client’s desire to retain a Firm’s legal services.

The retainer amount depends on complexity of the case. Litigation and sophisticated transactions may require extensive legal work that exceeds the initial retainer. This may require an attorney to request a retainer later, in order to cover anticipated costs for things like depositions, court proceedings, and a trial.

Any unused retainer will be reimbursed when a legal matter has concluded and the legal work did not exceed the initial retainer amount requested.

How does a retainer work with an hourly attorney?

The amount of the initial and subsequent retainer are usually calculated by the attorney multiplying their hourly rate by the expected number of hours that will be required to complete the legal work.

When monthly billing comes around (hello, first of the month!), the total number of hours worked multiplied by the attorney’s hourly rate will then be subtracted from your retainer, which would be held in the Firm’s trust account.

What is a contingency-based payment plan?

A contingency case works vastly different than a case that is billed hourly/monthly. When Attorney Mack takes on a contingency case, that means the client will not pay any up front amounts for legal work required for the case. Until the end of the case, the only charges are case-related costs, such as for copies of medical records, court reporter’s transcripts, or expert reports.

Within the contingency fee agreement established in the initial stages, there is an agreed-upon percentage amount of the total settlement or judgment earnings that is allocated to attorney fees. If there is no recovery, there are no legal fees. If there is a recovery, the legal fees are based on the total recovery amount.

Contingency fee agreements, although commonly associated with personal injury or wrongful death cases, may be appropriate in commercial disputes, property damage cases, and other types of civil litigation.