Legal Fee Structures

Nationwide Cerebral Palsy Resource Network

You are investigating the possibility of contracting with a lawyer and beginning the process of obtaining answers about your child’s birth injury. The injury and subsequent consequences of dealing with this devastating event are stressful enough. The thought of managing the legal fees may cause additional concern and worry.

At Stern Law, PLLC, we strive to make representation possible for all cases with merit. We want to assist you in any way possible, and instill you and your family with hope and relief. Please call (800)462-5772 for a free evaluation of your claim.

Looking at options

The process of litigation can be expensive and even frightening for families, but legal fee structures can make everything manageable, removing one source of stress. Lawyers, too, have much at stake when representing a client’s interest, so the fee structure must be reasonable and affordable to both you and the lawyer.

Lawyers can bill for their services in a myriad of ways, including:

  • A flat fee
  • An hourly rate
  • A monthly retainer
  • A contingency fee basis (a percentage of an award or settlement)

The contingent fee arrangement is almost universally used in birth injury cases because of the extraordinary costs to fund the litigation and the burden already imposed on the family by the harm caused. The contingent fee is necessary to “level the playing field” for the victim, who otherwise could not compete with the expensive lawyers and seemingly unlimited financial resources available to doctors, hospitals, and their insurance companies.

By taking on your case with a contingent fee arrangement, the lawyer’s right to be paid a fee becomes dependent upon the successful outcome of the claim. The so-called “no fee until you win arrangement,” provides legal services to many clients who would not otherwise be able to afford these services.

Three required elements when contracting a lawyer’s services

All fee agreements and payment arrangements made between a client and a lawyer should, and in certain states must, be agreed upon in writing. Legal firms generally require three elements to an engagement to represent a client when services are being contracted. These documentary requirements are:

Retainer agreement – A retainer agreement is a formal contract between you and a lawyer in which you agree to retain a lawyer and the lawyer’s law firm. The lawyer and his law firm also are formally agreeing to represent you under the terms and conditions set forth in the fee agreement.

Fee agreement – A fee agreement is a formal contract between you and a lawyer which outlines the monetary responsibilities agreed upon for the services retained. A fee agreement contains three main elements:

  • Fee structure – The fee structure is the basis on which you agree to pay the lawyer. This should not only include the legal services, but also detail how expenses will be incurred and paid. The terms and conditions should be discussed, understood, and agreed upon in writing before the lawyer provides legal services. Fee structures can range from a flat fee, an hourly rate, a monthly retainer, or a percentage of an award or settlement. Legal services can be paid up front, monthly, or on a contingency basis.
  • Payment agreement – The payment agreement details when the funds are due. In some cases, payment is not required until the case is finalized, while other arrangements could require an upfront retainer fee and periodic payment plan.
  • Affordability – Affordability is determined by you. If an attorney agrees to litigate the case, you will determine whether you feel the fee structure and payment plan is feasible, competitive, within reason, and consistent with the lawyer’s experience and success rate.

Medical record release – A medical record release is a document signed by you to authorize health care providers to release medical information to the attorney upon request. A lawyer will often have you sign a medical record release when services are contracted. This allows the lawyer to obtain any additional needed records to prepare for successful litigation.

Hedging risk

A medical malpractice attorney who represents you in a birth injury case on a contingency fee basis is hedging a substantial risk. He or she is agreeing to a portion of the settlement upon successful litigation and not requiring any funds up-front from you to pay for expenses due at various stages in the process. If the case is lost, a lawyer working under a contingency fee agreement will not receive compensation for his or her efforts. Therefore, this is a substantial investment risk for a lawyer and the law firm.

An initial consultation can help you and the lawyer decide whether or not to contract for services and under what terms. Both of you will agree on a fee structure option for litigating and/or settling a case.

Stern Law, PLLC uses a contingency fee agreement in which the lawyer receives a percentage of the final judgment or settlement allowed by law, regulated by the state, and approved by the judge. Court costs and other additional expenses of legal action usually must be paid by the client. The percentage fee will be computed before or after expenses are deducted from the recovery in accordance with state laws.

For more information about how who might be responsible for different types of expenses in your case, please call (800)462-5772 for free.