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Attorney Costs and Fees: Explained!

 How Much Will An Attorney Cost Me?

For most businesses and individuals who need quality legal counsel, the stereotypical high-priced lawyer always seemed to be far out of reach. Attorney’s fees are still widely believed to be a black box of fiscal pain, from which only the 1% can escape with their shirts intact. Thankfully, a few important innovations in the billing of legal services has put that stereotype in rapid retreat. Modern fee-shifting statutes allow certain groups to force the other party to pay for their own legal fees when enforcing their rights, making the assistance of expert legal counsel effectively free to the person or business. Flat Fee arrangements provide “lawyer cost certainty” for those who live on budgets and prefer up front fixed pricing. Contingency fee agreements mean you only pay if you win, eliminating the risk of legal bills without the means to pay for them from a judgment or settlement. Alternative dispute resolution keeps conflicts away from the courthouse, allowing a neutral mediator to decide your case without the stress of prolonged litigation, uncertain outcomes and routinely high legal fees. Oh, and by the way, you can still generally choose to be billed by the hour if all else fails, just like in the old days.  And finally, always remember that lawyer fees are negotiable and must be reasonable under California law, regardless of structure. So don’t be afraid to ask for a discount. The worst they can say is “no”.

Cost Per Hour

General Lawsuit Litigation

When the legal situation is unique and requires unknown amounts of legal counsel, attorney’s will typically only take the case on an hourly basis, and likely subject to a retainer fee. Unlike a simple business formation or speeding ticket transaction, personalized litigation presents many unknowns. How long will the suit take? Will the opposing party settle quickly or buy time with motion after motion? What is the likelihood of defending or filing an appeal? How many legal arguments are relevant to the situation, and which ones will require the most research? These risky unknowns would make it impossible for an attorney to provide a perfectly adequate quote for total attorney’s fees. In such situations, the lawyer will likely wish to bill hourly and provide whatever legal assistance you require on an as needed basis. The hourly billing rate for your attorney includes drafting and writing court documents, traveling and interviewing witnesses, discussing your case with you, and more. The hourly billing rate is also subject to the status of attorney working your case. Generally, partner time is much more expensive than associate time. It is also possible that in addition to the hourly rate quoted by partners and associates, the law firm may attempt to lower your costs by delegating certain routine tasks to law clerks and paralegals, who may be billed out for less than $100 an hour. The work completed by the support staff is always supervised by your attorney, and will not become legally binding until signed off by the bar licensed supervisor. As a result, do not be surprised when the bill includes a mix of partner, associate, law clerk, and paralegal time.

Divorce

Like litigators, divorce attorneys can not predict with certainty how much effort and time will be required to adequately represent your legal interests. A simple prenuptial agreement or divorce filing may take only a few hours to complete, but a long, drawn out disputed divorce with assets and children involved may realistically take hundreds of hours to litigate. Because of this uncertainty, a divorce attorney will likely request an upfront retainer and bill hourly. The total cost of a divorce depends greatly on the spouses who choose what to fight over. In such cases, the clients have the power to control legal fees, not the attorney hired to represent them in court.

Business

Business litigation is almost always a unique set of legal problems. Every business, transaction, and counter-party is different from the next. The facts of your case never quite match those of the litigant before you, and as such, significant legal research and motion arguing may be necessary to resolve the dispute at trial. Winning at trial requires presenting evidence to the judge or jury in support of your legal arguments, and litigation frequently devolves into an evidence finding exercise to find such proof of wrong doing. Depending on the difficulty the opposing party gives you, the requested evidence (discovery materials) may be in box after box of unrelated business material. Sifting through the often significant amounts of data provided by adversaries in the hopes of finding the smoking gun that will prove your case can be a long, expensive process for both sides. Because of the risks of extended discovery and motion practice, an attorney will likely demand a retainer agreement coupled with hourly billing if they wish to take your case and prosecute it fully.

Employment Law

Employee lawyers face some of the same billing obstacles as business litigators. Namely, the amount of time spent on each case changes widely from one client to the next, making it impossible for the attorney to predict the total time involved. Attorney’s represent both employers and employees in labor and employment law. On the defensive side representing employers, lawyers will almost always bill by the hour. Employee fees may be handled differently however. Many employee’s can not afford the hourly billing rates of a competent attorney even though they are likely to recover money from the employer for unpaid wages, overtime or wrongful termination. Because employee’s may be owed compensation, but can not afford the hourly billing rates of a lawyer, many lawyers offer contingency fee arrangements under these circumstances. Under a contingency fee agreement, your lawyer would receive a percentage of your final payment amount from the employer. This means the employee only pays the attorney for results, and no hourly billing is involved. Another possible feature of employment law attorney fees relates to available fee shifting statutes as described above. In many instances, if an employee wins the lawsuit, they may be reimbursed by the employer not only for the damage caused, but also for reasonable attorney fees used to defend their rights.

 Criminal Defense

[dt_gap height=”10″ /] Unlike most DUI and traffic infractions, the defense of alleged personal criminal activity changes constantly based on the individual circumstances of the case. Whether the charges are burglary, theft, assault, fraud, large drug possession, domestic violence or any other felony offense, the facts of your case will be different from the next. Because of this, defending a criminal case may only take a few appearances by an attorney, or at the other end of the spectrum, the attorney may spend years developing, investigating, interviewing, defending and arguing a case both at trial and at appeal. In these cases, a knowledgeable attorney can give the client a rough estimate of the possible costs and time worked involved before requesting a retainer to proceed. The retainer will be an advance of the fees incurred on an hourly basis, and may not include the entire cost of litigation. This means that the hourly rate charged by the lawyer will likely be paid in one or more retainer agreements as the case moves along.

Flat Fees

Many legal situations can be handled on a routine basis, such as DUI’s, speeding tickets, wills and trusts and bankruptcies. The predictability of the legal counsel required to protect your rights in those cases allow the attorney to make an educated guess about the total costs of representation. As a result, most routine legal matters are great candidates for fixed flat fee pricing.

DUI

A charge for driving under the influence or driving while intoxicated can be a very serious offense. Possible repercussions include heavy multithousand dollar fines, jail time, loss of license privileges and more. Additionally, some DUI’s may come with felony criminal charges that can impact future licensing and employment prospects. A quality DUI attorney recognizes the serious nature of these offenses and will work hard to find problems in your prosecution with a goal of dismissal, or alternatively thy will fight for a plea bargain that will take some of the sting out of the punishment. These cases require a careful analysis of the facts, law and possible bargaining opportunities. Within this framework however, attorney’s generally become quite good at determining what outcomes are possible and how much work it will take to achieve those results. As a result, DUI lawyer costs and fees can be set at the beginning of representation for an agreed upon price. Most fixed flat fee DUI attorney fees will run into the thousands of dollars due to the complex and serious nature of the charges. In addition to the fixed flat fee, potential clients should understand the limits of the DUI attorney’s representation. Often fixed fees come with fixed services. For example, an attorney may agree to represent you, but only during discovery, negotiations and trial. Appeals, expert fees, deposition costs and jury trials may not be included in the fixed fee amount paid. Generally speaking, a DUI attorney will charge a flat fee, and will tell you at the beginning of their representation how far that fee will go towards possible legal services.

House Closings

The routine nature of most property closings makes it a great candidate for fixed flat fee attorney arrangements. The title search, lien, liability and property record assessments involve using the same techniques in most every case. Modernly, electronic records at many county clerks offices means that these inspection can be done quickly by a qualified paralegal, whose work is supervised and signed off by the attorney. The predictable nature of this legal work, coupled with helpful technology, allows attorneys in many home closings to charge less than $500 per deal. If the attorney has an established relationship with a bank, escrow company or Realtor, these fees may be lower still. Home closing costs can be large, but a home closing lawyer fee is rarely one of the primary culprits. Because of generally low home closing attorney fees, parties to a property transaction spend little time negotiating rates and shopping around for better terms.

Speeding Ticket and Other Traffic Infractions

Most attorneys are comfortable offering their services for routine speeding ticket and other traffic violation tickets. Many counties even have dedicated traffic courts where attorneys can go to represent your interests and seek favorable terms. A speeding ticket lawyer can request a copy of the ticket from the courthouse if you provide them with your citation number, making the hassle on the client low to non-existent. The traffic attorney will use the ticket and surrounding circumstances to negotiate a reduced fine, lowered points or complete dismissal at your scheduled court hearing. This process becomes predictability to a quality traffic ticket lawyer, and the time involved to represent your legal interests can be measured quite accurately. Most attorney’s fees for speeding or other traffic tickets will be around one thousand dollars or slightly below. They often accept major credit cards over the phone and can represent you without ever needing a face to face consultation. Like every fixed flat fee agreement, the attorney or their staff should tell you the limits of their representation for that fee. For example, many traffic attorneys will agree to attend your traffic hearing and one additional hearing if necessary without additional fees. As always, a traffic attorney can never guarantee specific results, but most speeding ticket and traffic attorneys can improve outcomes in many cases.

Wills and Trusts

The rules pertaining to wills are highly regulated in every state. Entire Code sections, spanning hundreds of pages, detail the rules that must be followed for a will or trust to become effective and legally binding. This complexity has a certain unique impact on will or trust attorney fee costs. A standard will that complies with all regulations might not require too much time for an experienced lawyer to prepare. When the client requests a fairly straight forward will that leaves assets to beneficiaries in logical way that closely mirrors laws in the state, the attorney fee for a will or trust can be in the thousand dollar range. These flat attorney fees may easily climb however when the desired distribution of assets becomes complex or if the will leaves assets in a way not clearly outlined in the probate code. When the will becomes of a truly unique nature, for example leaving nothing to family and everything to a friend or neighbor, the attorney will likely have to work much harder to make the will bulletproof upon death. Many attacks are often made on wills, and the more complex, the more the flat fee attorney will ask to be compensate for the additional time and risk. Truly unique wills can cost multiple thousands of dollars in lawyer fees. Finally it is important to note that every time you request an attorney update or change a will, laws typically require them to destroy or cancel the old version and create a whole new will that supersedes the last. This is a safety precaution to later avoid costly litigation at probate. In practice, this means that if a client wants to make modifications to an existing will or trust, they can expect to pay a thousand dollars all over again.

Bankruptcy

No matter what chapter of bankruptcy you are wishing to file, the allowable attorney fees are highly regulated by the federal government and local bankruptcy trustees. Bankruptcies are unique legal situations where it is assumed that the filing party has more liabilities than assets, and therefore technically has no funds to pay legal counsel. Federal bankruptcy trustees have no problem with a filer receiving help from an attorney, however they also understand any payments made to a bankruptcy attorney will have to come out of the creditors pocket. To avoid harming the creditors too greatly by reducing their legal right to liquidated assets, bankruptcy attorney fees are generally capped. Standard bankruptcy filings by individuals only allow attorney fees of a few thousand dollars. In some more complex liquidation and asset protection disputes additional attorney assistance is often required to respond to legal motions and otherwise fight creditor claims. Where more involved legal counsel is required, the person filing for bankruptcy, typically through their attorney, must petition the bankruptcy trustee for an increased attorney fee award to handle the case. Many bankruptcy attorneys will advise their clients, whom they know have little if any cash, to use remaining credit card room for their attorney’s fees. The bankruptcy attorney will accept major credit cards, and likely tell the client to stop making payments on all dischargeable debt (including the credit cards they just used). The reasoning is that the credit card debt will in most cases be wiped out in bankruptcy, and paying down any balance on them would be throwing good money after bad. All bankruptcy fees must be reasonable. Under Chapter 7 and Chapter 13 bankruptcy, attorney fees are subject to judicial review for “reasonableness”. If a bankruptcy lawyer fee is below a certain threshold amount set by the local court, those fees will not be challenged by the court. This really forces practicing bankruptcy attorneys to limit fees to what the local courts allow, making attorney fees pretty flat and standardized by location. Different locations will have different ideas of what “reasonable” means, and Chapter 7 and Chapter 13 bankruptcy fees can range from $2,000 to $5,000 depending on geography. Because of the often more complex nature of Chapter 11 bankruptcies, attorney fees will often be large, but as explained above, still subject to court approval on a case by case basis.

Contingency

Attorney contingency fees are becoming a popular way for businesses and individuals to finance litigation costs when outcomes are uncertain and results matter. A contingency fee agreement with a lawyer generally involves both a percentage of recovery fee, along with a promise that if there is no recovery, there is no attorney fee. In practice, this protects clients from large attorney bills if they do not get the result they want. In addition to eliminating the financial risk of a losing legal claim, clients still retain a majority of the recovery when they do win. Equally important, contingency fee agreements motivate your attorney to make every effort to maximize your eventual payout and increase their ultimate fee. When the client is protected from high legal bills without recovery, and the attorney has an incentive to grow your compensation, both sides are more likely to be happy with the arrangement. It is this balance of interests and financial protections that allow both the attorney and client to work together towards a common goal without the high cost of quality legal counsel getting in the way. In California, all contingency fee agreements must be in writing, and discussed within a reasonable period of time at the onset of representation. Furthermore, California requires that every client receive a written disclosure/receipt for all amounts paid to the attorney under the contingency fee agreement. California also places restrictions on the types of cases that can be undertaken using a contingency fee model. For example, Criminal defense and family law cases are prohibited from using contingency fee arrangements to secure representation.

Medical Malpractice

These cases are often subject to contingency fee agreements when the client is suing. Medical Malpractice defense, like insurance defense in the personal injury space, still bill hourly in most cases. For clients who have been harmed however, they often can not afford hourly billing for an uncertain outcome. Medical malpractice attorney fees for suing parties generally come from the eventual settlement amount of the claim. It should be noted that medical malpractice personal injury lawsuits are costly to fight, requiring expert witness costs on both sides and lengthy litigation. Health care providers do not like losing a malpractice case and being reported to state or federal licensing boards, and they will fight hard to avoid losing any suit. Additionally, the high  burden on the plaintiff injured client makes most medical malpractice cases losers at trial. Additionally, in states like California, non-economic damages have been capped by law. In California for example, a winning plaintiff, no matter how much they were harmed, may only receive up to $250,000 in compensation for all pain and suffering. These limits on awards, along with the high cost of prosecuting a medical malpractice case, coupled with the low odds of winning at trial, make these cases high risk. Medical Malpractice attorneys will be very careful about which cases they take because they are so hard to win with such a low possible recovery. In addition to the usual percentage of recovery contingency fee, most attorneys will require the client to pay litigation costs on top of that amount. As mentioned above, the need for plaintiff friendly expert witnesses and research, in addition to court filing fees and jury costs, make litigation costs soar. A medical malpractice client can thus expect to pay many thousands in litigation costs on top of the percentage fee of 33 to 40%. These litigation costs are typically paid by the attorney during the trial, so the client never has to come up with money out of pocket to pursue their legal rights until compensation is achieved.

Personal Injury

Personal injury cases are typically less expensive than medical malpractice claims to prosecute, with fewer expert witness and less motion practice. Additionally, most personal injury cases settle before trial and recovery is usual possible for most clients. The less risky nature of personal injury makes it more likely a client will be taken on by a contingency fee attorney and get results. Most contingency fee attorneys will ask for 33 to 40% of recovery, plus litigation costs. For most clients, these percentages still allow them to recover compensation for pain and suffering, and other claims they may not have been offered without legal representation, making attorneys fees still cost effective. In fact many clients are surprised how much money they are legally owed, beyond the medical bills and lost wages they already incurred. Contingency fees are very popular methods of controlling legal costs while still allowing the client to benefit from expert legal representation.

Worker’s Compensation

Worker’s compensation fees are nearly identical to personal injury contingency fees. The big difference between the two involves the oversight of state specific laws governing the litigation process for workplace injury claims. In California for example, a special appeals board reviews workers compensation awards, and may limit attorney fees, in addition ot client recoveries, based on laws limiting compensation. The government control of injured person compensation means payouts are often lower than in traditional personal injury cases. In addition to the typically lower recoveries for worker’s compensation claims, these claims are streamlined and generally avoid the courthouse. This prevents the long, drawn out trial litigation that can both raise client costs and increase risks of unsatisfactory outcomes. However the straight forward claims and appeals process means most attorney’s are comfortable with receiving a lower percentage recovery of the total claim proceeds. This is good news for the client, who is likely fighting to receive even moderate compensation under the restrictive workers compensation regulations.

Product Liability

Product liability attorney fees are generally subject to contingency fee agreements. These cases are more difficult to prove and win than personal injury however, making attorneys less likely to take these types of cases. According to law, if a product harms a consumer, the manufacturer and/or retailer is strictly liable for damages that result. An attorney may establish product liability in a number of ways, and there are a number of legal defenses to these claims as well. Because of this, most attorneys will have to conduct a fair amount of research into the product and chain of distribution and ownership before being willing to take a case on contingency. The percentages of recovery typical in these cases is similar to those of personal injury more broadly, at 33 to 40%.

Class Action Lawsuits

Class action lawsuits are large, complex cases with many legal hurdles involved. Attorney fees typically amount to a percentage of recovery, but are subject to judicial review, and many attorney fees in class action cases are limited by the trial court, or challenged and reduced on appeal. The percentages involved in these types of cases are generally lower than personal injury lawyer fees because the recoveries are often times larger. Some class action lawsuits may net millions in recovery for victims, and attorney do not need 33% of the recovery to compensate them for the hours worked on the case. In million dollar cases such as these, attorney fee percentages may start higher for the first amount won, and then lower for every incremental dollar earned. In practice this means that the percentage shrinks the larger the recovery becomes, with a single digit percentage being possible once the recovery is in the millions.

Attorney Fee Agreements

Retainers

In most cases where an attorney is hired, the expected legal work required by the client will often exceed a few hours of the attorney’s time. To protect the attorney from working without pay, most attorney’s ask for a retainer fee at the formation of an attorney-client relationship. Typically the retainer is a multiple of expected hours to be worked, including other fees necessary to advance the case, including filing fees, deposition reports and expert witness costs. Because every legal situation is different, the amount of a retainer will also vary under the circumstances of your case. Most attorneys have a base retainer fee, but there is no guarantee they will not need more funds to adequately prosecute your case as time progresses. It is important to understand that just because you paid a retainer up front, it does not mean you won’t have further legal costs and be asked to advance additional retainers on an as needed basis. Unlike fixed flat fee arrangements, retainer payments do not protect you against further legal fees. Retainers are to be placed in a trust account by your attorney, and they may only withdraw payment from the trust account when the legal bill is payable for work expended. In plain terms, this means that you are always entitled to a refund of the unused portion of your retainer.

Lawyer Insurance

Some forms of legal insurance are available to individuals and businesses. These attorney insurance programs are similar to health insurance. In either case the insured can expect to pay monthly premiums, and received a predetermined amount of services in exchange on an as needed basis. Many of these legal insurance programs are offered through employers, and require minimal monthly premiums, sometimes less than $100 a month. In exchange for these premiums, the insured is typically required to only use approved lawyers, and only for very limited matters. For many people, the one size fits all approach to legal counsel under insurance plans means it never quite meets their unique needs when things really become important.

Litigation Costs

We know to be worried about attorney’s fees, but many people and businesses forget to appreciate how expensive litigation can be, even when the attorney is working for free. In most cases, a lawsuit requires certain minimum fees be paid to the courthouse where the suit will be heard, and these fees are rising rapidly throughout America. It is not uncommon for a base filing fee of $400 to be needed just to file a complaint. Even worse, every time a party responds to a motion or requests a hearing on a matter, further fees are required. Serving a summons to the other party may cost over $100 as well. Other routine, and expensive, litigation costs include deposition testimony, where court reporters must be present, paid and compensated for additional copies on a per page basis. After a few hour deposition is complete, a bill north of $500 is probably on its way to the litigants. Experts can costs thousands for their trial preparation and courtroom testimony, and many courts also require parties to pay for jury time as well. Because these fees can add up so quickly, it is important to discuss how much likely court costs will be in addition to the attorney’s fee.

What if I Can’t Pay My Attorney Bill?

In most jurisdictions in America, the non-payment of attorney fees for services provided allows the attorney to stop representation and file a civil demand for payment. It is important to remember that under most contingency fee agreements, the client is never responsible for attorney’s fees, regardless of outcome, so they should never receive a bill in the first place. Second, where a contingency agreement is not in place, most attorney’s request retainers, or advancement of hourly fees, to begin representation. This means that the amount you pay towards a retainer is not earned by the attorney until thy perform services on your behalf. As such, all clients are entitled to return of the unused portion of retainer fees in their trust account with the attorney. So before worrying about what you may owe the attorney, first determine if you are in fact owed anything, or if the agreement waives your fees in totality (contingency fee).

If you are certain that you owe money for services received by an attorney, it is usually a good idea to spend a moment discussing your financial situation and proposing an alternative fee arrangement going forward. An attorney is allowed to stop serving you as a client after non-payment of fees has occurred, and they may also be able to receive a civil judgment against you that can result in garnished wages and property liens. Additionally, all of the work and effort expended by your attorney in defending your case may wasted if the representation is cancelled for non-payment. The client always has rights in the case an attorney dismisses them for lack of payment. First, the client is entitled to all case materials already prepared by the attorney, and the attorney must reduce the adverse impact of changing attorneys on the client. Prompt delivery of case files is a major component of this duty to make switching attorneys easy for you. Second, when a case is close to trial, and you would be materially harmed if an attorney withdrew on such short notice, a judge may decline their request to withdraw and demand they continue representation for the duration of trial. Finally, most attorney fee disputes allow for the possibility of mediation and/or arbitration before a lawsuit is commenced by either side. This provides a relatively cheaper forum for resolving the fee dispute, and allows the client a chance to defend their situation before a judge gets involved.

Attorney Fee-Shifting Statutes

While it is true that the standard “each party pays their own way” system of attorney’s fees applies today, fee-shifting statutes allow individuals or businesses to pass their attorney’s fees to the other party in certain circumstances. Each of these particular circumstances are created by the legislature, whether state or federal, and they all essentially work the same way. The government decides that the enforcement of a certain legal right is important, so they then create a law forcing the courts to award payment of attorney’s fees to the prevailing party. This means the winning client never needs to pay their own attorney a penny out of pocket. If the case settles before a prevailing party is determined, fees may not be awarded, so look to your attorney fee agreement to see how the attorney wishes to be paid if a settlement occurs, typically using one of the below techniques.

Federal and State Attorney Fee Laws

[dt_gap height=”10″ /] Federal fee-shifting laws apply in all 50 states, while state laws only apply to the state that passed them. Some common federal statutes involve civil rights, employment rights, discrimination cases and lawsuits against federal employees acting on behalf of the government. Civil rights cases often involve interactions with law enforcement or other branches of government that deprive an individual of their constitutional rights. If a police officer wrongfully shoots a suspect, the suspect can sue and force the government to pay attorney’s fees. Employment and discrimination lawsuits force the employer or discriminator to pay your attorney’s fees. These are common in wage, overtime and wrongful termination disputes, as well as rental housing and entitlement benefits. Other federal laws protect consumers from attorney’s fees when suing debt collectors and mortgage lenders. There are many federal fee-shifting statutes, and an attorney is well positioned to investigate how your specific case might qualify for fee shifting.

State fee-shifting statutes are more broad and varied, and are used in addition to every federal statute as well. A notable example is in California, where the “private attorney general doctrine” under California Code of Civil Procedure 1021.5 allows a prevailing party an award of attorney’s fees if the lawsuit benefits a significant number of people or results in the enforcement of an important legal right affecting the public interest. The broad nature of the statute means this provision is worth applying in many employment, discrimination and business cases. Similar versions pf the private attorney general statute may be found in other states. Another example of a common fees shifting statute is in New York, where any consumer that is harmed by the deceptive acts or practices of a business, including false claims, is entitled to attorney’s fees. Another common fee-shifting statute involves recovering attorney’s fees from an opposing party who’s lawsuit is deemed to be frivolous and without merit, which keeps a lid on nuisance lawsuits filed against both people and businesses. It is often worth consulting an attorney to see if any state specifics laws might allow you to avoid fees for your case.

Private Contract Attorney Fee Clauses

Many modern form contracts possess a type of language within them that allow the prevailing party of the lawsuit to recover their reasonable attorney’s fees from the losing party. These prevailing party clauses are everywhere, from landlord/tenant lease agreements, car and retail purchases to consulting contracts. A judge will look to see if the contract both parties willfully signed contained a provision for lawyer fees, and if so, the judge will award those fees to the prevailing party. In some cases a client may sue for three reasons, but only win on one of them. Under these circumstances the court will have a more difficult time determining the prevailing party, and may award a lower fee amount as a result. It is also important to note that just because the clause exists, a judge can still set aside the provision if it appears to be unfair or otherwise fails to meet other minimum contracting standards.

Alternative Dispute Resolution

The time, energy and costs of judicial resolution are often too great a burden on both businesses and individuals who desire fast and affordable legal outcomes. Alternative Dispute Resolution, or ADR for short, is a great way to avoid this unpredictable litigation process at a courthouse. The two main flavors of alternative dispute resolution consist of mediation and arbitration. Generally speaking mediation and arbitration hearings can be heard quickly, often within a month, and the parties have the choice of making the outcome legally binding on the parties, providing judicial judgment protection. The quick scheduling and binding nature of ADR can drastically lower overall attorney fee bills.

Mediation

Mediation has become a popular first choice for solving legal problems among parties. The typical mediation process is less burdensome than trial litigation. First the parties will agree to mediation. Next, the parties will choose a neutral mediator to “mediate” the resolution process. The neutral mediator will not pick sides or choose winners and losers. Rather, they will help the two parties discuss the issues important to either side, and help both sides discover a resolution that fits their needs. In many cases, the parties to mediation simply want to be heard, and have their wrongs acknowledged by the other side. Unlike litigation, mediation looks to face to face compromise and communication to resolve disputes, without opposing attorney’s demanding full enforcement of every possible legal right. A quality mediator can be found in many places. In fact, many courts have already setup mediation clinics for small claims, divorce and custody issues. It would be a good idea to check with your local courthouse to see if any mediation services are available for your legal dispute before contacting private services. Other sources of lower cost mediators include the Better Business Bureau (BBB) and local law schools. FInally, there are always private companies that specialize in meditation services, the American Arbitrage Association being among them. The costs of mediation can vary widely based on location and mediator demand. Most mediators in the private sector request hourly billing of their time, or alternatively half and full day rates. These mediator fees can easily run into the thousands of dollars as a result. Most mediation services also demand administrative fees for the use of facilities and personnel that are hundreds of dollars in most cases. In addition to the hourly or daily rates quoted by private mediation services, it is useful to remember that most mediators will bill the parties for work done outside the negotiating table for billable research and investigative work. Mediators will routinely bill one day of research per day of negotiations, effectively doubling the daily rate advertised.

Arbitration

Arbitration costs are almost identical to those of mediation as described above. one important difference in arbitration fees results from the slightly different nature of arbitration versus mediation. While mediation allows both parties to negotiate among themselves to find a satisfactory outcome, arbitration involves a more active role by the neutral arbitrator. In many cases, arbitration is binding on the parties, and the arbitrator exclusively decides the outcome. Negotiations occur between either side and the arbitrator, who researches the claims and speaks to each side alone. An arbitrator will likely discuss the possible legal outcome of the claim at hand, and will discuss with each party privately the best chances they have at winning the case. From there the arbitrator will use the facts of the case to privately negotiate with either side until the arbitrator gets the parties to find some sort of middle ground. This arbitration process can last much longer than a day, especially where claims involve large amounts of evidence or expert advice. Because the stakes are higher in arbitration than mediation, attorneys are typically present and parties are more prone to fight vigorously for their case and persuade the neutral arbitrator to see things their way. As a result, the high hourly cost of arbitrators, attorneys and facilities means the total costs of arbitration can quickly climb into the tens of thousands of dollars.

As you can see, mediation and arbitration are not magic bullets that avoid burdensome legal costs, despite being a compelling alternative to litigation in many cases. Finally, it is important to note that even when the arbitration decision is binding, ADR may not be the end of litigation. For a number of reasons the arbitration decision may be overturned by a court. Common grounds for reversal include proof of arbitrator or mediator conflict of interest, fraud, awards exceeding the scope of ADR and incomplete or unethical arbitration judgments. While a trip to the courthouse is possible after ADR, most courts respect the ADR process and will not want to disturb the arbitration or mediation judgment, making judicial appeal both costly and ineffective in most cases.

Small Claims Court

Attorney representation is, as a general rule, not permissible in small claims court. However small claims does not necessarily mean small fees. While this type of court reduces the legal expenses for possible clients, small claims court still has filing fees and other costs that easily run into the hundreds of dollars. Additionally, agreeing to proceed with small claims court may mean losing out on important legal rights and arguments that could help their case if an attorney was involved. Finally, in a modern attorney fee world where contingency fee, fee-shifting and flat fee arrangements are possible, it often makes sense for a person to discuss with an attorney the potential no cost options available to them before proceeding to small claims court without the assistance of legal counsel.

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