Different ways to pay your lawyer and which one makes the most sense

You may go much of your life without a lawyer. If so, consider yourself lucky. But at some point, you will probably need a lawyer. If you have multiple legal cases that require your attention, you should look for a lawyer with different specialties.

You may not know much about how to hire a lawyer before you need one. You may not know much about how to pay them, either. However, you should understand at least some of the basics in this area. You and your lawyer will have to come to an agreement at some point, unless you've found a particularly nice lawyer who works pro bono.

In this article, we'll talk about some of the different ways you can pay your lawyer. We'll also discuss when each one makes the most sense.

Paying your lawyer through a contingency plan

Let's say you need a lawyer because a person or business has caused you harm. In this case, you could file a personal injury lawsuit against that person. Such lawsuits are heard in court every day across the country. They are heard for medical malpractice, after car accidents, after someone slipped and fell in a store, after a dog bite, for defective products, and so on.

If you hire a lawyer for one of these cases, you will likely pay them on a contingency basis. This payment structure makes sense because if the lawyer doesn't win your case for you, you would probably prefer not to have to pay them anything.

Lawyers typically receive 25 to 40% through contingency plans. The total amount you will have to pay them will not be clear to you until you see how much money you get through a settlement with the defendant or through a jury verdict in your favor.

In many cases, personal injury lawsuits do not result in a jury verdict. More commonly, there is a settlement between the defendant and the plaintiff. There is usually a certain point at which a defendant will not agree to a settlement. They may feel that you do not have enough evidence to convince a jury that they caused you harm, so they will ask their attorney to excuse them from liability.

If your lawyer wins your personal injury lawsuit or gets you a settlement, you will have to pay them as soon as you get your money. This way, you will settle your debt to them. You will probably use the remaining money to pay your medical bills and replenish your depleted bank account when you had to miss some of your work while recovering from your illness or injury.

Pay them an hourly wage

You can also hire a lawyer and pay him or her at an hourly rate that he or she will quote you at your meeting. This hourly rate can vary depending on many different factors.

For example, you can hire a lawyer on an hourly basis if he or she is drafting your will. You can agree to an hourly rate if he or she is defending you in a criminal case. Some business lawyers charge an hourly rate. If you need a lawyer because you are divorcing your spouse, you can still pay your lawyer on an hourly basis.

A lawyer often charges an hourly rate when they know they're likely to put in long hours of work you're asking them to do. For example, if you hire a lawyer to assist you with your divorce, they can probably bill you each time you meet with them. They can bill you for the time they spend studying the details of your divorce. They can bill you for the cost of meeting with your soon-to-be ex and their lawyer to work out the details regarding child support and alimony.

You may not want to pay a lawyer by the hour because, in theory, they can keep billing you the longer you need their services. If the situation you need them for lasts for days, weeks, or even months, you may find yourself with a staggering legal bill at the end of your time together.

However, many lawyers will not accept any payment structure other than an hourly rate when dealing with criminal defense or divorce law. If you want to use their expertise, you may have to settle for their way, as you are unlikely to find another lawyer who will accept a different payment structure for these types of services.

Payment of an order-related hourly rate

Sometimes you can find lawyers who accept an hourly rate. For example, if you are hiring an attorney because you are selling your home, they will probably not charge an hourly rate. Instead, real estate attorneys usually want a portion of the sales price when they sell your home for you.

This fee can be in the three-figure range, but it can easily run into the thousands. Some attorneys charge more if you also have them draft a real estate contract, review one, etc. Complex transactions tend to incur higher fees. For example, if your real estate attorney is helping you with some complicated property issues, they may charge a higher hourly rate.

Hire a lawyer on a fee basis

Many people get through life without ever having a retainer attorney. This is a relative rarity, although it is more common in some business circles. If you own or run a business and need legal advice frequently, it often makes sense to have a retainer attorney or even an entire firm.

Some companies need lawyers to draft contracts when they merge with another company. Others may want to have a lawyer nearby at all times if individuals frequently file lawsuits against them.

Normally, if you have a lawyer on a fee basisthat is, you pay them a certain amount per month, or sometimes per quarter, whether or not they do anything for you. This relatively small amount guarantees that they will be immediately available when you need them.

Now you know the common ways to pay for a lawyer, if you ever hire a lawyer, be sure to clarify these important details before signing anything.