Retainer Fees for an Initial Consultation
Initial consultation fees are fees charged by attorneys for the service of meeting a potential client to review his or her case. Virginia does not regulate the fees that lawyers may charge for this service. Lawyers may charge a wide variety of consultation fees for their services. Some lawyers set a flat fee for an initial consultation with any potential client (and offer a full refund to clients who hire them, in certain cases). Some charge a flat fee for an initial consultation only about one type of case, or cases in which the potential client is likely to need a lawyer’s immediate assistance. Others charge an hourly rate on a fully refundable basis. Still others charge a nominal fee to cover office expenses and refuse to refund it. This leads to a wide variation in initial consultation fees and that variation has nothing to do with the value or merit of the case. As always, lawyer ethics rules require that the fee charged for any legal service be reasonable.
A few lawyers charge potential clients nothing for an initial consultation, as a way of determining if they agree with the potential client about the merits of the case or the value of the claim. Other lawyers may charge a relatively small fee for a consultation , of $25 to $50, for example, but this amount may be credited toward a fee for subsequent legal services. This practice in essence means that the lawyer expects to be retained as a result of the initial consultation. It also prevents someone from receiving legal advice from one lawyer and then using that lawyer’s advice to pursue the case himself, without retaining the lawyer.
Many consumer lawyers work on a "contingent fee" basis in which they ask the client to pay only a small retainer at the time the case is filed and the larger fee is collected only if the case is won. In that case, the initial consultation is usually free to the potential client or a very nominal fee. Other lawyers charge an interim "hourly rate" for the period of time between the initial consultation and the time the case is accepted on a contingent fee basis. In very rare cases, lawyers may require a monetary retainer in order to provide an initial consultation.
Never pay any fee without asking the lawyer about his or her policy on initial consultations. If the lawyer does not make clear what the charges will be, then do not consider his or her services any further.
Filing Fees for Court
When you file a lawsuit in state or federal court there is a filing fee required to commence the action. This is known as a "Court Filing Fee." The Court filing fee for a civil action in Federal Court is currently $400.00. In the Colorado State District Court in Denver, the Court filing fee to file a Complaint is currently $315.00. State court filing fees vary based on the jurisdiction. Filing fees in various states and federal courts can be found here.
A company that is a defendant in a lawsuit is going to have its own experience with the Court filing fees. Depending on the domicile of the company and the location of the lawsuit, the company may be able to transfer the case to another Court. For example, if a plaintiff files a lawsuit against a company in Federal Court in Colorado, that Court has concurrent jurisdiction with the Federal Court in New York. A plaintiff can probably file suit in either Court, regardless of the plaintiff’s state of domicile. The company defendant may be more comfortable litigating the case in its own home state, and therefore likely has a right to transfer the case to Federal Court in New York. In New York, the Court filing fee for a civil action is currently $400.00.
The filing fee for a Complaint is usually due when the complaint is filed with the clerk of the court. The person filing the Complaint must pay the filing fee if it is not waived, unless the person is allowed to pay the fee in installments or the fee is deferred. The clerk of the court allows a person to pay a filing fee in installment when the person files an appropriate motion. A person who files a complaint in federal court may be allowed to defer payment of the fees by completing an Application to Proceed in District Court without Prepayment of the Fee (aka "IFP Application"). If the court grants the IFP Application, the filing fee is deferred until the end of the case. The filing fee must be paid even if the person filing the complaint wins the case.
If a plaintiff cannot afford to pay the Court filing fee, he or she can apply to the Court for a waiver. If approved, the Court will waive the filing fee.
To support an application for waiver of a filing fee the person must submit a form detailing the person’s financial condition appointed by the established authority. The adequacy of the form depends upon whether state or federal law governs. If state law applies, the form must be filed with the appropriate state office or clerk of court. If federal law applies, the form must be filed with the court itself. The supporting form should also include a certification from the person’s attorney (if any) stating the nature of the action and believe that the person is qualified for the waiver.
More information about the filing fee and potential fee waivers can usually be found on the applicable court’s website.
Attorney Costs and Payment Methods
Attorneys who sue companies employ various methods of billing for their services. Hourly fees have long been the industry standard for various litigating attorneys, while many who sue companies on behalf of consumers now charge consumers a percentage of the recovery to represent them through contingency fee agreements. There are also flat fees which can be used when the work performed has an easily recognizable cost. It is not unusual for an attorney to employ a combination of payment methods in order to arrive at the true cost of suing a company.
Hourly rate fees vary widely on both the high and low end. A mid-range hourly fee of around $300 to $500 is typical for attorneys in many different locations, while there are lawyers who will charge more than $500 per hour, as well as those who charge less than $300 per hour. In addition to paying the attorney by the hour, some clients may also be responsible for any out-of-pocket expenses that must be paid to complete the work being done in a lawsuit. It is up to the attorney to determine how much they will charge for their services as well as how much they will charge the client for expenses that must be incurred in the course of their duty, as well as the type of work performed.
Contingency fee arrangements for a lawsuit against a company usually guarantee a percentage of the total judgment or settlement against the company. If the attorney wins the case, the agreed upon percentage is taken by the attorney as their fee; if the case is lost, the attorney’s client does not owe the attorney a single penny. This seems like a risk-free arrangement for the consumer why would anyone turn down an arrangement like this? The problem with this kind of fee arrangement from a consumer’s perspective is that the percentage of the court judgment or settlement has to be balanced against the attorney’s hourly rate fee, as it usually is. In other words, if the total judgment exceeds $100,000, an attorney who charges 10 percent of the total will be paid $10,000. However, an attorney who charges $400 per hour will be paid $10,000 for being retained 25 hours, so the consumer in this case is actually better off financially, although the loss of his case will mean loss of possible compensation. Clients should be aware that smaller claims usually cannot bear the expense of contingency fee arrangements, and the consumer will most often not be able to file a lawsuit unless there is a reasonable chance that the total judgment will be large enough to justify the expense.
Flat fee agreements are ideal for straightforward claims such as in a medical malpractice or a state tax claim scenario where the work required frequently has a predictable cost. Flat fees usually don’t account for unexpected problems, delays and other actions that can make a case more complicated that originally thought. With a case such as a commercial litigation or a complex business transaction, a flat fee may not be an ideal payment method.
Discovery Costs for Evidence and Information
Costs for discovery are another layer of expense in a lawsuit. This means evidence gathering can also be costly. Taking depositions and hiring experts further increases lawsuits costs. Some aspects of evidence gathering and discovery in a lawsuit to prove your claims can cost you.
Show me what you’ve got! That’s the question we lawyers ask when we send the other side a document request, or subpoena someone’s records. It’s generally called "discovery" and is the process of showing what you have to prove your claims or for the other side to prove theirs. It’s required in many cases before a Judge or jury gets involved.
Discovery costs can vary widely depending on the complexity of the matter and the nature of the claims and evidence being requested or offered in a lawsuit. The usual, out of pocket expenses in a case for discovery purposes are filing fees, expenses for issuance and service of subpoenas, and expenses for transcripts of testimony.
"Gottchas" involve the consequences you bear for not satisfying the other side’s document or deposition requests. You pay a higher price for Gottchas by adding costs for additional depositions, additional preparation time for depositions, document production time, and your attorney fees.
Some cases require experts to support your claim. These experts are generally paid according to the value of their time and expertise.
However, there are limits on how much your lawyer can give to an expert as a retainer fee up-front and how much the expert can charge on a contingency basis. A retainer is a deposit of money that needs replenishing once exhausted. An hourly fee is paid for each hour of work performed. A contingency fee can only be paid once a final judgment or settlement is reached. If you lose, you may owe the expert a fee anyway.
Lawyers are in the fee business. The objective is to minimize your fees for legal work.
Costs Associated with Mediation and Settlements
The expenses involved in suing or defending a suit against a company can be broken down into five broad areas: attorney’s fees, litigation expenses, costs of alternative dispute resolution, possible judgment and other defendant liability, and costs of decree or judgment enforcement.
It is not uncommon for plaintiffs to incur expenses related to mediation and settlement before or during litigation. For example, parties at times will agree to mediation before filing home mortgage foreclosure actions, or require that a mortgage foreclosure lawsuit be mediated as part of case management or under court order. Such mediation efforts may necessitate the hiring or retaining outside counsel as settlement counsel to handle the mediation sessions and/or settlement negotiations. Such counsel may charge a flat fee , or block bill their time using hourly rates. The fees and charges of settlement counsel can add up quickly.
Unlike trial, however, which was addressed earlier, some forms of mediation can be less expensive or cost effective than others. For example, mediation that occurs early in litigation, before costly discovery and motion practice may be undertaken, can save time and money. Similarly, mediation held in advance of, or in lieu of, a hearing before a magistrate or judge also can be cost efficient, but the process is best completed through the auspices of a magistrate or court. Thus, while a voluntary, pre-suit mediation may be extremely cost effective, it can be a different story when the court orders mediation, unless the parties are able to agree on a mediator between themselves.
Taking the above into account, the costs associated with mediation and settlement can vary widely.
Other and Various Costs
In addition to the costs listed above, there are a number of miscellaneous and hidden costs incurred by suing a corporation. Suing a corporation can involve out-of-state discovery, travel for depositions or trial, technical expert costs (e.g., on patent rendering or software development), and certain potential penalties. Out-of-state discovery can be expensive. Since many corporations are headquartered out-of-state, many cases will involve taking some key discovery in the state where the corporation is located. For example, for an out-of-state case, there may be a need to depose several witnesses, or perhaps a key corporate custodian, at the corporation’s headquarters. This can involve airline tickets, hotels, meals, etc. It can easily add up to several thousand dollars in expenses. And, if the case is pre-discovery, you may find out-of-state discovery is needed before you even make the decision to proceed with litigation. The courts rarely wait for an inferior party to conduct its own discovery. Instead, in most cases, the court will require both parties to exchange their respective initial disclosures, and generally expects the parties to conduct co-pursuit of discovery. Your travel is your expense! And, in some instances after your victory, it can be your opponent’s expense. Make sure you are prepared for potentially being out thousands of dollars before you even file the Complaint. In many cases, you need to file administrative fees, fees for attorneys’ licenses in a state where that attorney has not practiced, and fees for out-of-state witnesses to appear for deposition or trial. For example, if I go to California to depose a corporate custodian of records, California generally requires witnesses to appear pursuant to subpoena, and that the witness fee as well as travel expenses be paid in advance. If the corporate headquarters is, for example, in Redwood City, California, it can be very inconvenient to fly into San Francisco, an hour away from Redwood City, only to have to get an Uber ride to the Redwood City courthouse. But if the corporation refuses to accept service and you require the records/preparation of the corporate witness, you literally have to take a day out of the office to meet with the witness, or enlist the assistance of local counsel to obtain service of the subpoena and/or make arrangements for appearance. Furthermore, many states have a requirement that the witness be licensed to practice law in that state. Certainly any attorney from a state or Federal bar is licensed to practice law in Federal court as well as at home (especially in federal court), but many states require the witness for deposition/further appearance at trial to have a state bar registration to appear. For example, in California, an attorney who has not yet been admitted to practice in California is required to sign an affidavit of an attorney currently licensed in California who can attest to the witness’s qualifications to testify in the matter. In a case where the witness is the patent prosecuting attorney, the attorney may be required to fly back to meet with the other attorney in their home state, and then travel back to the site of the deposition; further driving up costs. Also, when involving out-of-state discovery, many clients like to send me out of state to review potential infringement products in person, have me present my observations to the client in person, and to discuss the results with the client in person. In some instances, there also may be patent renderings. Again, the costs are borne solely by the Plaintiff, not the defendant. Finally, like many foreign countries, federal court procedures are not very strict on the issue of prosecuting criminal contempt against corporations. However, many states go much further than the Feds. For example, in California, practicing attorneys are permitted to prosecute criminal contempt cases in minor cases in their home state. I had a case where a corporation failed to pay final royalties. When we attempted to collect on the final royalties, the corporation had expended them out of the U.S., and failed to make the final payment due to a clerical error. However, when it was brought to their attention that they had not paid by the due date in the license agreement, they reimbursed the royalty. The problem in this instance is that the monetary amount owed would have exceeded the jurisdiction of the federal courts as the amount owed was relatively small. Thus, the deference of the court to California law, per its own discretion, prohibited us from pursuing the corporation for the final payment, since it would have exceeded the statutory minimum amount in controversy. In summary, several types of miscellaneous and unexpected expenses may be incurred when suing a corporation, including (among others) travel expenses, out-of-state fees, and penalties.
Financing Options
If you have been injured in an accident, and the responsible company will not pay, it can be hard to imagine how you could ever afford to sue them. Fortunately, there are many alternative sources of financial assistance, if you know where to look. Although people usually think of law firms as the financial partner in a lawsuit, not every firm does financing, and even when they do, they expect a pretty big chunk of your recovery to compensate them for the risk of a contingency case.
But there are some firms that are willing to provide alternative financing to cases, not just because they want your business for personal-injury or auto accident cases, but because they are interested in the actual case itself and how prevailing in the case will impact future generations of Americans.
For example, The Cochran Firm is now working with Public Justice, and they are both providing pro bono legal representation to clients who need it, but also the financing necessary to cover investigation and litigation expenses. Their interest here is in obtaining a multi-million dollar verdict that provides justice for clients with very serious injuries, but that also sends a message to corporate America about safety , and the cost of failing basic safety tests on products that the company wants to sell to consumers.
Litigation funding can also come through individual funders, and many companies have begun offering this option to help bridge the gap between case valuation and trial readiness.
As with any arrangement, however, you need to understand the implications of the funding. Funding companies are businesses, and as such, they want to profit off of their investment in your case. Your legal counsel can help you understand the terms of a funding deal, and let you know if it is worth pursuing.
For non-legal expenses, you may also turn to friends and family to assist. You can speak with them about your case, and request that they provide assistance with your medical expenses during the time your case is pending. From loans to deposits, funds can be kept aside for your medications, custodial care, and other expenses that may not actually be legal in nature, but that do impact your ability to retain legal services.
It’s not always easy to discuss your financial situation with others, or to admit that you can’t afford to pay upfront, but the legal system is designed to provide access and assistance to those who truly need it, and your legal counsel can help you find the best options for your specific needs, within your specific budget.