What Do Legal Rates Mean? And What One Should You Choose?

Business Litigation
What Do Legal Rates Mean? And What One Should You Choose?

What Do Legal Rates Mean? And What One Should You Choose?

by Van Den Heuvel Law Office


There are generally 3 kinds of rates that attorneys charge; (1) flat rate, (2) hourly, and (3) contingency.

First, flat rates are a great way to shift the risk of expensive litigation to the lawyers who litigates your case. Just like an insurance agent, your lawyers will take the risk of large costs and insure against wallet catastrophe from legal fees.

Second, hourly rates allow for the most client control over cost. Without having to pay all up front, you can determine just how far and how much you want done on your case by how many hours you authorize. Be aware that this can be more costly than flat rate work because your cost is not capped and therefore you may end up spending way more than you thought.

Third, contingency fees are a great way, like flat fees, to avoid taking on the risk of cost in litigation. The attorney will typically receive up to 33 and 1/3 percent of any recovery on your case. Consider that if you do not recover anything, neither does your attorney.

Picking what rate is best in your situation is a matter of not only personal choice, but also cost effectiveness according to your case.


Attorneys use retainers in order to be able to work on a case and get paid for that case. Your retainer is little more than a deposit, like a construction fund, used to start funding work on your legal issue. Periodically, your attorney will send you a statement of funds used and notify you when more funds are required for work.

Key Factors to Hourly Rates:

Hourly rates can be tricky if you don’t know what to look for. Clients tend to look to the hourly rate as a good measure of cost, but this would be a mistake. Really, you should look at not only the rate per hour but also billing increments. While ¼ an hour is common, 1/10 is more advantageous to the client. Consider this example:

Hourly rate I=$100@1/4th of an hour;

Hourly rate II=$150@1/10th of an hour

So, if both attorneys talk for 5 minutes then attorney I will charge $25 while II will charge $15. That is 40% savings on rate II that is $50 more than rate I.

As you can see, total hourly fee and billing increments matter.



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