Lawyers’ Fees: Types of Legal Fee Arrangements

In “shopping” for a lawyer, the first thing the usually comes to mind is how much a lawyer
charges. Generally, the professional fees of a lawyer depend on the nature and complexity of
the case, the financial capacity of the client, the extent of work required, among other factors.
The usual legal fee arrangements are: initial consultation fee, fixed retainer, time-based
charging, acceptance fee, and contingent fee arrangements.

The initial consultation fee is what you can expect the attorney to bill you for your initial
consultation with him or her. While some lawyers offer free consultation, some charge initial
consultation fees. There are other attorneys who bill on their usual or reduced hourly rate.
There is no standard practice in the Philippines. Hence, the best thing to do before going for
an initial consultation is to call before making the appointment.

The fixed retainer fee is a predetermined fee paid on a lump sum, in advance of any legal
work to be performed. In corporations, for example, a general corporate retainer would
include general corporate services such as drafting minutes and board resolutions, secretary’s
certifications, ant the like. There are also specialized retainer fee arrangements depending on
the requirements of the client. It can be expected of course, that in specialized retainer
arrangements, the fixed retainer fees are much higher.

Time-based charging is a fee arrangement where the lawyer bills based on his given hourly
rate. The client is billed based on the actual time spent by the lawyer. At the end of every
billing cycle, which in most cases is on a monthly basis, the lawyer sums up the actual time
he or she spent for your case, doing research, answering your calls, consultations, meetings,
etc. The bill is computed by adding up the total time spent by the attorney multiplied by the
latter’s given hourly rate. Before entering into such arrangements, you may want to ask the
lawyer for an estimate of how much time it would take to complete the activity.

The acceptance fee is the fee charged by the lawyer for merely accepting the case. The
rationale behind this is, once the lawyer agrees to act on behalf of a client, he generally loses
the opportunity to handle cases for the opposing party. Thus, a lawyer’s acceptance of a case
would mean that he is forgoing prospective work for the other party. The acceptance fee is
normally applied in litigation, and coupled with a per stage or per activity type of billing, where
the lawyer divides his professional fees depending on the stage of the proceedings.

In contingent fee arrangements, the lawyer gets paid only if the legal activity is successful. In
most cases, contingent fee arrangements are utilized by clients who cannot afford the services
of a lawyer. In such case, the lawyer gets to collect a certain portion of the property or money
involved, if he succeeds in the case or activity. Because of the risk of not getting paid at all,
lawyers tend to collect between 30%-50% of whatever the client gets.

In most cases, out-of-pocket expenses such as filing fees, travel expenses, printing etc., are
excluded from such arrangements. Since these expenses are incurred for the benefit of the
client, they are the client’s responsibility. Of course, you can always ask for a cap on expenses.

The person looking for a lawyer must bear in mind that, generally, professional fees are
subject to negotiation. You can even try to negotiate terms of payment, if this is possible.

http://ndvlaw.com/lawyers-fees-types-of-legal-fee-arrangements/
Lawyers’ Fees: Types of Legal Fee Arrangements

It’s important to know just what you’re paying for in any type of transaction – especially when
it comes to legal fees which can pile up pretty quickly.

To prevent unwanted surprises, here’s a quick guide to fees and arrangements typically paid
to lawyers:

Initial consultation fee

In the Philippines, there is no standard practice when it comes to initially consulting with a
lawyer. Some lawyers charge a fixed rate for consultations; others charge by the hour. Inquire
before scheduling an appointment.

Acceptance fee
Following the initial consultation, both you and the lawyer you consulted can opt to reject or
proceed with the case.

When a lawyer accepts your case, it comes with a fee. This payment indicates that the lawyer
is entering an exclusive arrangement with you and relinquishes opportunities to represent
other parties. Call it an opportunity cost.

Fixed retainer fee

Once you decide to hire a lawyer, a fixed retainer fee is paid in advance. This covers the
lawyer’s initial expenses as well as the services your lawyer will render down the road. Call it
a down payment, if you will.

The retainer fee often puts attorneys on call basis when they handle legal cases for their
clients over a set period of time. The fee is usually held in an account separate from the
lawyer’s regular hourly wage.

Flat fee
Flat fees are paid for cases or services considered basic or routine such as filing copyright
registrations, writing a will, and preparing basic estate planning documents.

Hourly rate
This charge covers the hours the lawyer spends working on a client’s case – from consultations
to meetings to research.

An attorney’s hourly rate is usually billed per month. Some attorneys will charge different
hourly rates for different services. A law firm’s senior members are pricier than younger
associates.

Before agreeing to anything, ask your lawyer for an estimate of how long the prep work and
the actual litigation might take. This will give you a fair idea of how much you may be paying
in the future.

Contingency fee
If a client can’t afford a lawyer’s services, they can enter into a contingent fee arrangement.
The attorney’s fee will be paid with a percentage of the compensation awarded in a successful
case.
If the client loses, no money changes hands. However, the client will still have to pay for the
attorney’s services.

This type of fee may be arranged in cases involving large payouts sought in damages
pertaining to property or personal injuries.

It’s okay to negotiate fees

If you’re looking for a lawyer, it’s important to remember that professional fees are sometimes
negotiable, so don’t be afraid to ask.

In lieu of a negotiated fee, you may be offered a payment scheme. Some lawyers may even
allow you to negotiate the terms of payment.

https://www.duranschulze.com/legal-fee-arrangements/
Can you afford a lawyer?

Pro bono bases – cases handled for free – are done by lawyers with a soft spot for those with
less in life, or who just can’t say no to a needy litigant.

Some lawyers like the late Winefreda Geonzon who formed the Free Legal Asssistance
Volunteers Association (Free Lava) in the 1980s, made prison reform in the congested Cebu
city jail, especially the needs of child offenders, an advocacy and community service. After
her death in 1990, the torch hasn’t been taken up with the same fervor as when she started
the campaign as legal aid director of the IBP Cebu city chapter.

More often than not, lawyers prioritize winning the case of clients for a clear fee.

In 2012, both IBP chapters in Cebu city and province adopted a schedule of “standard
minimum attorney’s fees” after updating the one published in 2005.

The new version added the word “standard”.

The rates are supposed to guide fellow lawyers in charging their clients, and for litigants to
know what it costs to retain professional legal services.

Its main rationale is economic.

Joint Resolution No. 02-2012 states that both IBP chapters adopted the schedule “ïn view of
the continuous increase in fuel prices and of basic commodities thereby adversely affecting
the corresponding office maintenance and other related expenses in rendering legal services”.

The basic fee is P500 per hour for “plain consultation.”

Research would cost P500 per hour.

A monthly retainship should start at P5,000.

The “acceptance fee” of a lawyer to defend a person accused in a criminal case starts at
P30,000 for the lowest level court such as the Municipal Trial Court in Cities.
Major crimes like murder and rape are tried in the Regional Trial Court (RTC). The acceptance
fee for a lawyer would start at P50,000.

In case a guilty verdict is appealed to a higher court, the lawyer’s acceptance fee is P75,000
for the Court of Appeals, and for a case in the Supreme Court , P100,000.

This is separate from “appearance fees” billed each time a lawyer shows up in court for a
client’s hearing: P3,000 per hearing in the RTC or P1,000 per hour.

In the lower courts, a lawyer would ask for P1,500 or P800 per hour.

For a case heard before the Sandiganbayan or Court of Appeals, the fee is P5,000. A lawyer
who appears before the Supreme Court would expect to be paid at least P10,000 per hearing
or P2,000 per hour.

http://cebudailynews.inquirer.net/56676/can-you-afford-a-lawyer
External legal retainer; sample agreement.

“x x x.

Thank you for communicating the desire of your company to retain our legal services.
We are glad to extend our external legal Retainership for the legal needs of your Company,
the xxx Corp.
Stated below are the terms and conditions, for your conforme hereunder:

1. Purpose/Coverage: Legal advice/consultations thru personal meetings, telephone,

SMS, email, fax or postal mail.

Contracts for review or for draw up by the law office shall be charged at a discounted fee of
fifty per cent (50%) from the normal charges thereof, which depend on the time invested
therein by the handling lawyer.

Other operations advise shall also be charged at a 50% discount, compared to the normal
charges therefor.

2. Monthly Retainer Fee and Mode of Payment: xxx Thousand Pesos (Pxxx/month, to be
automatically deposited to our “xxx Bank Account, xxx Branch, xxx City, Current Account
Name: xxx, Current Account No. xxx ”, not later than every 15th day of every month, without
need of notice/demand therefor.

There shall also be added an additional one-month retainer fee every December of each year
that the herein Legal Retainership Agreement is effective.

3. Period and Renewability: This Legal Retainership Agreement SHALL CONTINUE TO BE

IN EFFECT, WITHOUT NEED OF YEARLY RENEWAL, UNLESS TERMINATED IN WRITING, by
either party, within thirty (30) days before the intended termination date.

4. Meetings Outside the Law Office – A lawyer of the law office who attends a legal meeting
outside Las Pinas City and within the cities of Makati, Manila, Pasay, Paranaque or Muntinlupa
shall be entitled to an appearance fee of xxx THOUSAND PESOS (Pxxx) per such outside
meeting in the said specified cities.

Outside the abovementioned five (5) cities but within Metro Manila, the appearance fee shall
be Pxxx.00 per such meeting.

5. Deposit for Actual Costs. – The client shall maintain a deposit with the law office in the
amount of xxx Thousand Pesos (Pxxx) to cover all actual costs of the law office for the client,
e.g., paralegal staff time, transportation, meals for field work required by the client, postage,
xerox/reproduction, computer printing, fax, long distance calls, mobile phone calls, and other
actual out-of-pocket expenses incurred by the law office as it serves the legal needs of the
client.

The said deposit shall be liquidated and reported to the client in writing by the law office for
replenishment purposes from time to time when the said deposit is about 50% depleted.

6. Special Legal Matters or Court Cases. – Specific court cases or special legal missions or
assignments in behalf of the client shall be covered by separate special legal retainership
agreements, the terms and conditions of which shall be subject to negotiation and agreement
by the parties.

Thank you.

X x x.”

http://attylaserna.blogspot.com/2015/01/external-legal-retainer-sample-agreement.html