The Finance Blogger

Financing Legal Fee’s

Financing Legal Fee'sThe are few times the vast majority of people ever need to contact a lawyer and incur legal expenses. When they purchase a home, sell  a home, prepare a will, or deal with minor traffic infractions. Few of us ever have to worry about a major criminal case, or lawsuit or  major divorce proceedings. Financing Legal Fee’s can be a problem for some.

Selling a home for example can incur legal fees of between $500-$1000. Preparation of  a  will particularly if it is uncomplicated can be in the range of $300-$600. Court cases involving criminal activity or defense of DUI type traffic infractions can cost significantly more and approach $10,000-$100,000. Not everyone can afford to pay these kinds of fees so it is important to understand what the cost will be prior to your case being taken by a lawyer and how you will finance your legal fees.

Financing Legal Fee’s – How Much Will my Defense Cost

Most clients want to know how much their defense will cost when they are facing criminal charges. The answer depends on the circumstances of your case and the quality of the defense team. Most attorneys will be able to provide a quote after initial consultation regarding your situation. There are some points to consider when shopping for an attorney. Here are several questions that you may want to discuss.

Fixed or Variable Costs

Will the price of the case be fixed or will the price increase as the case progresses? Pay-as-you-go contracts can become very expensive particularly if the case lasts a long time. You do not want to find yourself running out of funds in the middle of the criminal process. Competent attorneys should be able to provide a fixed price up front.

Does the Price Include the Trial

Another question to confirm is whether the total price quoted by the attorney includes  the trial process. If your case needs to go to  court and be heard by a judge or jury an extended court case can drive up the costs significantly. Good trial preparation can result in a settlement or even dropping of charges before the case ever goes to court. Skipping proper case preparation to save money might actually cost you more in higher legal fees and in the worst case a guilty verdict.

Hidden Costs

You need to ask your lawyer if there are any hidden costs that you should be aware of. Better to find out before you make the decision to hire instead of when you receive his invoice. Request a full disclosure of all possible costs and legal fees prior to signing an agreement. A good law firm should be able to provide all of the required legal service for a flat fee and then absorb the cost when legal assistance may be needed from other firms. If professional services are required your lawyer is legally required to disclose any fee splits.

Other Expenses

Complex cases often require the use of investigators, psychologists and other non-legal staff. There may be costs associated with obtaining documents, evidence or other records. You need to understand these fees upfront and you should discuss them with your attorney. Experts agree that a good rule of thumb is to estimate about 10% of your legal fees for these outside costs.

Financing Legal Fee’s

There are companies who will provide loans for you to finance your legal fees. Be very careful when negotiating these fees regarding payment terms, interest rates, and other fees that may be included. Legal firms will also sell your legal fees to collection agencies and other firms that specialize in collecting debts. These firms may take a cut of 10 to 12% of your legal fee. So don’t be surprised when the company different than your legal firm comes calling to collect your legal fees.

We are providing this information to assist people in selecting lawyers and understanding how financing of their legal fees will work. You need to take full accountability for hiring a lawyer and negotiating the legal fees prior to entering into an agreement for your defense. These are guidelines only and in no way are providing legal advice. Your comments are welcome.

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One Response to “Financing Legal Fee’s”

  1. Great advice! I wish I had known about legal fee financing issues previously!

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