When prospective clients come to see me, they always arrive with an arsenal of questions. Good questions. They want to know if they’re entitled to alimony. Child support. How much their exposure will be if he or she has traditionally been the primary wage earner. It’s usually at the end of my consultation that clients ask what my hourly rate is. Surprising to me, that’s often where their inquiries stop, and I’m not sure why.
There are so many variables when it comes to calculating an attorney’s fees that not to ask what his or her rate includes potentially puts clients at risk for surprises weeks, months, or even years down the road. To prevent this from happening, I take time to explain what comprises my hourly rate, which charges are included, and which charges are not. I explain why I don’t charge a flat fee. I also apprise them of unforeseen circumstances, those situations they might not anticipate that could affect how much their divorce will cost them in the long run. Here’s what I tell prospective clients they should be asking.
1. Which costs are passed along to the client? By way of example, and there are many, I don’t charge for routine postage or routine copies. A lot of attorneys do. Despite the low hourly rates some attorneys might quote upfront, they end up charging clients a fortune when calculating incidentals such as photocopying, scanning documents, and listening to voicemails separately. If an attorney does charge for postage or copies, ask if you can receive correspondence electronically to cut costs. Be sure also to inquire whether or not your attorney bills for inter-office conferences (conferences between attorneys at the same firm). The more you account for upfront, the better chance you have of staying within your budget.
2. Does the attorney double (or triple) bill for travel time? Double or triple billing occurs far more often than most people think and is not something I do. The way this can work is that an attorney will go to court for, say, three different cases and bill each client in full for travel time to and from the courthouse. In other words, if the round trip to court (not including time spent in court) is one hour, the attorney will bill three hours for one hour of billable time. You may be wondering, “Is this ethical?” The answer is an emphatic, “No.” Unfortunately, that doesn’t mean it isn’t happening.
3. How many cases has the attorney withdrawn from before its conclusion? There are a lot of firms that rack up fees and then fire clients when they fall behind or are unable to pay. Eliciting an answer to this question will reveal how often the attorney out bills what his or her clients can afford and how loyal the attorney is to his or her clients’ cases. For me, withdrawing from a case is the last resort. If necessary, I put clients on a payment plan, believing that it’s in the client’s and my best interest to finish cases that I start. Of course, payment plans cost me money. But withdrawing from a case means that not only will I lose out on billable hours, the client will also likely end up paying more when a new attorney must spend valuable time reviewing the case just to get up to speed. Once I’m handling a case, my name and reputation are on the line, and I want a good result for all my clients.
4. If the attorney raises his or her rate, will it apply only to prospective clients or all existing ones? All attorneys raise their rates over time. Law firms are businesses and, therefore, subject to rising costs just as other industries are. Unfortunately, when some attorneys raise their fees, they do so for all of their current clients, not only the ones they retain after the increase. A client who hires an attorney at $300 per hour, for example, might find himself or herself paying $350 per hour at some point during the case. Not only does this make budgeting harder, it's likewise a unilateral modification of a contract that the client and attorney entered into together.
As to whether the attorney is allowed to make this unilateral modification, the answer is, “It depends.” Rate modification should be covered by the retainer agreement, as that is the contractual basis for the attorney’s representation. People need to read the retainer agreements. Period. I always insist that clients read mine front to back. If the agreement does not permit the attorney to modify the rate in an existing case, he or she cannot do so. That the attorney would try, though, is telling. If the attorney attempts to and the retainer doesn’t stipulate it, the client should inform the attorney in writing that he or she would like to follow the hourly rate provided for in the retainer agreement. If the attorney refuses, it’s time to find a new attorney.
Paying the new hourly rate may be seen as an agreement to the modification unless the client regularly objects and/or makes it clear in writing that payment of the rate solely is to complete the case and does not amount to a de facto acceptance of the modifications of the contract terms. Even then, upon the completion of the case, the client is now in the unenviable position of trying to recoup those paid fees. Not a good place to be.
5. Does the attorney charge the same hourly rate for all clients? Not to be confused with number four, some attorneys will base their hourly rate on what they think a client can afford. That means that the same work, performed by the same attorney, might cost two clients dramatically different amounts. As a client, you don’t want to be placed in the uncomfortable, not to mention unfair, position of subsidizing another client’s case. Your attorney’s rate should be reflective of the services he or she provides you.
Divorce can be costly, and you want to ensure that you are maximizing the value of your expenditures during the process. To be forewarned is to be forearmed. A reputable attorney will take no issue with detailing how your payments are applied. Feel free to ask for those terms in writing, too, so if necessary you can reference them in the future. If an attorney is evasive about how he or she allocates fees, move on. Like any solid relationship, the best ones, including the one with your attorney, are built on trust.
Joshua Stern is a family law attorney and owner of the Law Offices of Joshua E. Stern. For more information about these and other divorce-related issues, visit www.JESFamilyLaw.com, or follow him on Twitter and Facebook.