I get a lot of telephone calls from potential clients asking me how much I cost.  Often times, the questions is stated like this:  “Can you please tell me how much your retainer is?”  First of all, what is typically thought of by potential clients as a retainer, is actually called an advanced fee deposit in Wisconsin.  This is a deposit made toward legal work on a specific case.   Whenever I am asked this question over the phone, I inform the caller that I do not quote fees over the phone, and that an initial consultation is necessary before I can give any individual potential client a fee quote or estimate.  There are two reasons for this:

First, each case is unique.  Therefore, it is necessary to meet the potential client prior to being able to give an accurate fee quote.  If your case is relatively simple and straightforward, why would you want to pay the same advanced fee as the person who has a more complex matter?  If I just quote a standard amount over the phone, chances are you may be paying much more up front than is necessary for your case.

On the other hand, if you have a very complex case, it would still be unfair for me to quote a standard advanced fee amount.  Potential clients want to know an estimate of what their total legal fees might be.  Potential clients tend to assume that the advanced fee deposit will cover most of their legal fees.  If you have a complex matter, and I quote you a standard advanced fee deposit, you will likely be mad if that deposit runs out much earlier than you anticipated.  By meeting in person, and discussing the specifics of your case, I can give you a better idea just how much money your case is going to take from start to finish.  By discussing the specifics of your case, and your personal situation, I can better tailor an advanced fee or payment plan that will help you reach your legal goals in the most financially efficient manner.

Second, hiring a lawyer just based on cost can be a costly mistake for a potential client.  Potential clients who are simply looking to hire  the lawyer with the lowest advanced fee deposit are setting themselves up for a bad lawyer-client relationship.  Your legal matter is important.  You are going to be working closely with your attorney and it is important to know whether or not you and you attorney will work well together.  Different client and different attorneys have different personalities.  Knowing that your attorney is on the same page as you is key for obtaining your legal goals.  Hiring an attorney based simply on price undermines the importance of your case, and indicates that the potential client is more concerned with money than with the outcome of their case.  Both are important.

Finally, for some of the same reasons just mentioned, you don’t want an attorney who is willing to take your case simply based on the payment of a standard advanced fee.  If a lawyer says over the phone that he or she will take your case as long as you pay a certain amount, all that lawyer cares about is the money.  You then are an income stream for the lawyer, as opposed to a client.  A lawyer should take the time to sit down with you and evaluate your specific situation before deciding whether or not they can help you.

Traditionally, lawyers have billed their clients an hourly rate for work performed.  The usual model is that the client pays an advanced deposit, also known as a retainer, and the lawyer bills his time from that deposit.  Each month, the client gets an invoice saying that the lawyer worked X amount of hours on the client’s case.  X hours is then multiplied by the hourly rate that the client has agreed to pay, and that is the amount that the lawyer takes out of the client’s deposit that month.  For example, if the client made a $1,000 deposit, if the lawyer billed $200 in one month, $800 would remain in the client’s deposit.   When the deposit runs out, the client is then asked for another deposit, if the case is not yet concluded.  If the case is concluded before the entire deposit has been used, the remaining amount is returned to the client.

The obvious negative side of this set up is that the client never knows exactly how much his or her case will end up costing.  At least not until the case has been completed.  The and lawyer can only guess how much work the case is going to require, and the client never knows exactly when their advanced deposit will reach a balance of zero.  On most cases, some month require more work than other months, so a client whose deposit has only been billed $100 in one month, may find that their deposit has been billed much more the next month.  It just depends on the timing and demands of the client’s case, and the uncertainty can be very unsettling for the client.

The one big benefit to hourly billing is that the lawyer gets paid only for time actually spent on the case.  If the case settles early, the client obviously pays much less than if the case takes longer.  However, some people believe that hourly billing encourages the attorney to put unnecessary time and effort into cases, or to make them last longer than is necessary. At Hagner Law Office, S.C., I do everything I can to keep my client’s fees as reasonable as possible, regardless of whether they are paying hourly, or on a flat-fee.  Practical and professional legal advice does not have to cost an unreasonable amount of money.  The client determines what their goal is for the outcome of their case, and I do everything in my power to achieve that goal as efficiently as possible.

Billing by the hour has been the primary billing method used by attorneys for a long time.  In recent years, there has been a shift to offer flat-fee billing to clients.  Under flat-fee billing, a client is told the total cost of their case prior to hiring the lawyer.  This can be done in one of two ways:  1)  Quoting a client one fee for the entire representation, no matter how complex the case gets, or 2)  Quoting a flat fee that increases with the complexity of the case.  Under option 2, the client still knows the most the case will end up costing,  because the lawyer will explain the potential stages that the case may go through, and the fee associated with each case.  For example,  a criminal client may pay a flat fee of $1,000 if the case is resolved before being set for trial, or $2,000 if the case actually goes to trial.  This information would be given to the client at the initial consultation, so the client will be well aware that going to trial will cost an extra amount of money.  But the client still has the benefit of knowing that the case will not cost more than $2,000,  regardless of what happens.

Client often prefer flat fee billing because it allows them to know exactly how much their case will cost from the beginning.  Unlike hourly billing, where the cost is directly related to the amount of time the attorney works on the case, flat-fee billing eliminates the uncertainty of not knowing how much the case could end up costing.  Flat-fee billing also reduces the number of instances in which a case ends up costing the client more than the client anticipated.

The one downside that clients often talk about with flat-fee billing is that the cost is the same, no matter how many hours of work the attorney spends on a case.  In the example above, the criminal client pays $1,000 for the case if it gets dismissed at the first hearing, or if it takes several motions and hearings to achieve the same result.  Some clients feel that if the case gets dismissed earlier in the process, the fee should be reduced.  However, flat fee billing assumes that the outcome is worth the same to the client, regardless of when it is achieved.  Stated another way, getting a case dismissed and off the client’s record should be worth a lot to the client, regardless of how much work it takes to get that accomplished.

Finally, some clients are concerned that flat-fee billing encourages the attorney to settle the case as quickly as possible.  The theory is that the attorney will not want to put much effort into the case since the fee will be the same no matter how much work is done.  You should be confident that I will zealously represent you and provide you with practical legal advise no matter which billing method you choose.  The choice to settle a case, or to proceed to trial, is a choice that only the client can make.  I will make sure that you have all the information necessary to make the best decision for your case, so that the best outcome can be achieved.