If you have a paid arrangement with your attorney or law firm, you should almost certainly have a written representation agreement with the attorney or the firm. Here are some things that your agreement should cover.
Fees: Perhaps most obviously, your agreement should spell out how your fees are charged. As a general matters, fees are charged in one of three ways:
– Hourly fee: This is the most common way that you will be charged fees. You will be charged for every hour as well as every part of an hour that someone from the firm works on your case (parts of an hour are usually divided every 1/6th or 1/10th of an hour). The hourly rate may vary depending on who is performing the work at the time; for example, a partner’s time may be charged at $600 an hour, while an associate’s time is billed at $300 an hour, and a paralegal’s time billed at $75 an hour. The rate may also vary depending on what kind of work is being done, for example, if the person is simply doing research on your matter as opposed to appearing in court on your behalf.
– Fixed fee: A relatively newer fee model, a fixed fee means that you pay the attorney the stated fee no matter how much work went into the matter. However, for more complicated matters the fee may be broken up into stages or milestones so that it is not necessary to pay the fee up front at once or pay for work that is not done. Moreover, if your matter took considerably less work than was expected, your attorney may not be permitted to charge you the quoted fixed fee — it is against ethical rules to charge an incredibly high fee or charge for work not performed. However, when it comes to fixed fees it can be a grey area as to whether the fee is reasonable in light of the ease with which the matter was completed.
– Contingency fee: This fee model is often used in personal injury cases (and is usually barred by ethical rules for many domestic relations and criminal matters). With a contingency fee, the attorney takes the case in exchange for a percentage of whatever money is awarded to the client; the client pays no fees up front. If the client gets no money, neither does the attorney.
In addition to establishing the fee structure, your representation agreement should set out how often the attorney or firm will invoice the client, how long the client has to pay an invoice, and what acceptable forms of payment are.
In addition to the attorney’s fees, the agreement should also spell out whether the client or counsel is responsible for costs and fees incurred in handling the matter. In addition to filing fees, costs such as court fees, other filing fees, deposition fees, witness fees, travel expenses, and even long-distance bills and printing costs may be apportioned between client and counsel. Larger firms often pass all of these costs onto the client, while attorneys working under a contingency fee generally front these costs and then deduct some of them from the award.
Aside from the money issues, your representation agreement should also cover the operational matters of the attorney-client relationship. Perhaps most importantly, the agreement should detail the extent of the representation — the more detailed the description, the better. If your matter involves litigation, you should state whether or not the attorney is obligated to appeal an unfavorable result. If there is something you want your attorney to handle, you should insist that it be included in the description of the representation — you don’t want to be stuck with your attorney claiming that what you want is outside the scope of the representation (and may actually cost more to handle!).
The agreement can also cover issues such as what kinds of firm employees will handle certain aspects of the matter — for example, a client may insist that only a partner of the law firm can sit “first chair” on a trial or that only senior associates can conduct depositions; however, if you choose to dictate how your law firm uses its employees, be prepared to pay more! The agreement should also spell out how the attorney-client relationship is ended: under what circumstances can the client “fire” counsel, what notice must the attorney give to inform the client that the matter and representation have concluded, or what happens to the client files after the matter is closed?
As a general rule of thumb, the longer and more complicated a legal matter is, the agreement should be equally detailed. A simple personal injury case may only need an agreement of a few pages, whereas a business having a firm on permanent retainer to handle any legal issue that should arise may need a particularly complicated and detailed agreement.