Attorney's fee


Attorney's fee

Attorney fees (note that the use of the word 'attorney' connotes lawyers broadly: solicitors and barristers) are the costs of legal representation that an attorney's client or a party to a lawsuit incurs. Attorney's fees are assessed in a number of ways, usually set by contract in advance of the representation, including by billable hours, flat fees, or contingent fees. Attorneys who voluntarily accept work on behalf of indigent clients often work pro bono.

An upfront fee paid to a lawyer is called a retainer. Money within the retainer is often used to "buy" a certain amount of work. Some contracts provide that when the money from the retainer is gone, the fee is renegotiated.

In some jurisdictions, in a civil case, a lawyer for the plaintiff can take a case on a contingent fee basis. A contingent fee is a percentage of the monetary judgment or settlement. The contingent fee may be split among several firms who have contractual arrangements amongst themselves for referrals or other assistance. Where a plaintiff loses, the attorney may not receive any money for his or her work. Many countries prohibit contingent fees as entirely unethical. Most jurisdictions in the United States prohibit working for a contingent fee in family law or criminal cases.

In the United States, state laws or bar regulations, many of which are based on Rule 1.5 of the American Bar Association's Rules of Professional Conduct, govern the terms which lawyers can accept fees. Cornell Law School web site, [http://www.law.cornell.edu/ethics/aba/current/ABA_CODE.HTM#Rule_1.5 ABA Model Rules of Professional Conduct (2004), Rule 1.5: Fees] ] Many complaints to ethics boards regarding attorneys revolve around excessive attorney's fees. [Gabriel Chin & Scott Wells, "Can a Reasonable Doubt have an Unreasonable Price? Limitations on Attorney's Fees in Criminal Cases," [http://papers.ssrn.com/sol3/papers.cfm?abstract_id=224273&high=%20Gabriel%20CHin 41 Boston College Law Review 1 (1999)] ]

Amount of fees

The range of fees charged by lawyers varies widely from one city to the next. Most large law firms in the United States bill between $200 and $500 per hour for their lawyers' time, though fees charged by smaller firms are much lower. The rate varies tremendously by location as well as the specific area of law practiced. Typically insurance defense firms have lower hourly rates than other non-insurance firms, but are compensated by having steady, regular paying work provided. Locations like Salt Lake City will average $150 per hour for an associate's time on a basic case, but will increase for larger firms.

Many survey of hourly rates are done. The American Intellectual Property Law Association ("AIPLA") commissions a survey of its members every 2 years and it publishes these in what it calls a "Report of the Economic Survey". The latest one is dated June of 2007. Rates are collected for 14 geographic areas and by associate or partner. See www.aipla.org for more information, although the Surveys are not made available on-line but must be purchased. Many courts have followed the rates shown by these AIPLA surveys and they are highly-regarded for Intellectual Property litigation.

The State Bar of Oregon and the Colorado State Bar also have published an Economic Survey of rates for various areas of Oregon and Colorado and these are available on line.

Perhaps the most widely followed set of rates are what is called the Laffey Matrix that is available from the United States Attorney's Office for the District of Columbia. These have been available since 1982 and are updated each year. The hourly rates are shown by years of experience. For June 1, 2006 to May 31, 2007 the rates are as follows: 20+ years of experience, $425 per hour; 11-19 years, $375; 8-10 years, $305; 4-7 years, $245; 1-3 years, $205; and Paralegals/law clerks $120. [http://www.usdoj.gov/usao/dc/Divisions/Civil_Division/Laffey_Matrix_6.html] . The Laffey Matrix appears to be growing in acceptance by many court throughout the United States, but the matrix must be adjusted to account for higher or lower costs for legal services in other areas. Hourly rates are increasing almost every year and some lawyers charge substantially higher than the rates shown by the Laffey Matrix. The first American attorney to regularly charge a four-digit hourly fee ($1000 and higher) was Benjamin Civiletti in late 2005. [Andy Soltis, "LAWYER RAI$ES THE BAR - FIRST-EVER 1G/HR. FEE," "New York Post", 13 December 2005, 23.]

Loser pays

Most countries operate under a "loser pays" system, sometimes called the English Rule. Under the English rule, the losing party pays the successful party’s attorney fees (please note that the award is referred to as "attorney fee" as the fees do not belong to the attorney, but to the prevailing party), as well as other court costs. The United States is a notable exception, operating under the American Rule, whereby each party bears its own legal expenses. Some tort reform advocates propose adopting a "loser pays" rule in the United States. For example, a judge may say: "I am ruling for the plaintiff on the amount of $(amount of money) plus all court costs and attorney's fees."

Awards of attorney fees in the United States

A number of federal laws provide for an award of attorney fees for a prevailing plaintiff, such as:
* Class actions
* Civil rights violations, see Civil Rights Attorney's Fees Award Act of 1976
* Freedom of Information Act violations
* Copyright and patent cases
* Antitrust actions
* Lemon law cases
* Suits against the federal government where the position of the government was not "substantially justified"

Note that these "fee shifting" awards are a characteristic of the law enforced and do not necessarily depend upon the court in which they were brought; state courts can and do sometimes hear lawsuits brought under federal law. So if, for example, a person brings a civil rights action in state court and wins, he may be entitled to an award of attorney fees.

Most states have statutes under which attorneys' fees may be awarded to a prevailing plaintiff, such as an action on a contract where the contract contains a provision allowing recovery, or an action brought under consumer protection laws. Both plaintiffs and defendants are frequently awarded attorneys fees in divorce and child custody actions, although this is an unusual circumstance, since such awards are made under the court's power to divide property or award alimony and child support. A majority of states allow generally for an award to any party in a lawsuit, if another party has forced him to expend money on attorneys fees to defend against a claim utterly or substantially lacking any possible merit (frequently called "abusive litigation").

For example, in the State of Georgia, a trial court must award attorneys fees if a party has brought a claim "with respect to which there existed such a complete absence of any justiciable issue of law or fact that it could not be reasonably believed that a court would accept the asserted claim, defense, or other position." O.C.G.A. § 9-15-14(a). A trial court may, but is not required to, award attorneys fees if a party has made a claim "that lacked substantial justification or . . . was interposed for delay or harassment, or if [the opposing party] unnecessarily expanded the proceeding by other improper conduct . . . ." O.C.G.A. § 9-15-14(b).

There are many ways of calculating prevailing-party attorney fees. Most courts recognize that actual costs may be disproportionate and inequitable. Thus, many jurisdictions rely on other calculations. Many courts or laws invoke a "lodestar"' calculation: reasonably expected billable hours multiplied by a reasonable hourly rate, sometimes multiplied by a factor reflecting the risk or complexity of the case. Courts in class actions frequently award fees proportionate to the damages recovered. The Class Action Fairness Act of 2005, which, among other provisions, regulates the fees that can be awarded in a class action, was passed in response to concerns that courts were not adequately overseeing the award of such fees.

Some statutes permit awards of attorney fees to prevailing defendants in extraordinary circumstances, such as proving that the litigation was frivolous, in the sense of it being objectively base and in brought in bad faith.

Tort reform and attorney fees

Some tort reform proposals in the United States seek to further regulate attorney fees. Florida passed a law limiting contingent fees in medical malpractice cases. Some object to these laws as an unfair restriction on freedom of contract.

References

See also

* Law of costs
* Laffey Matrix
* No win no fee
* Criminal costs

External links

* [http://www.cobar.org/members/economicsurvey2000.pdf The Colorado Bar Association 2000 Economic Survey]


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