Legal problems happen, but unfortunately most people think they happen to other people and so they don’t plan for them. The biggest hurdle for most people is overcoming the initial up-front cost of hiring a lawyer. Traditionally, lawyers work on an hourly basis and pay themselves out of their client’s? money that they hold onto in an escrow account.
Typical initial escrow account deposits? are several thousands of dollars. The lawyer then performs work and bills the client at an hourly rate. ?This hourly rate could be as low as $100.00 or as high as $400.00 an hour or even higher. ?The total bill is paid out of the escrow account and the client reimburses the escrow account.? There are two primary problems with the hourly model. First, is the initial up front cost to the client. ?While the lawyer isn’t actually paid the money that is placed into escrow, the client still has to part with a relatively large amount of their money before the lawyer starts to work. ?The second problem is planning. ?Because the? lawyer bills by the hour, each month will be different. One month the lawyer may only work an hour and half and send the client a bill ranging from $150.00-$600.00?. But the next month the billable hours could increase to ?15 hours with the bill skyrocketing to between $1,500.00-$6,000.00. And since most lawyers’ invoices are due within 30 days, that’s a huge difference in a month.
Another common billing practice is to charge a flat fee that depends on how the case goes. Here lawyers charge one fee if the case can be settled out-of-court and another fee if the case requires a judge or jury to decide what happens.? While this does put all of the costs out in the open in front of the client, it still requires a significant cost to the client to hire the lawyer and if things change for the case before the end, the client can end up with a much larger and unplanned for bill.
The way that we have addressed these problems is to create a new way of doing things. We charge 3 fees. An Initial Fee, a Monthly Fee, and a Travel Fee. The Travel Fee is billed when we have to travel to handle case matters and usually only applies to cases we take out of McLennan County. A description of our Travel Fees can be found here. The Monthly Fee? is a $600.00 fee that is billed while we are working on the case, but not always billed because sometimes there are times when nothing is happening on a case. The final fee, the Initial Fee, is the fee we charge to take on a new case and I?s based on what type of case it is and the facts surrounding the case. All cases are different and that is the primary? factor in what we charge for the Initial Fee.