This is the second installment of a three part article on attorneys fees. The first part explored the different types of attorney fee agreements, namely, hourly, contingent, and flat attorney fees. This second part addresses attorney expenses.

Attorney expenses are the extras charges found on legal bills that are not for legal services. As with attorney payment options, there are a number of ways attorneys structure these extra fees. Given the potential size of these added expenses, you may be surprised to learn that some attorneys charge clients for every expense they incur and other attorneys do not charge clients for any of these expenses.

Out-of-Pocket Costs

Out-of-pocket fees may include court filing costs, costs for third party experts, copying and printing costs, and other seminal costs.

Most lawyers charge clients for some out-of-pocket costs they incur in handling a legal matter. Some attorneys charge clients for every out-of-pocket cost they incur. Other attorneys only charge clients for out-of-pocket costs if they are extraordinary or unique to one particular client. A few lawyers do not charge clients for these costs. Attorneys who do not charge for these costs often view these costs as part of their own business overhead that is to be paid out of the lawyer’s profits.

Lawyers who charge clients on an hourly basis are more likely to pass these costs on to their clients.
Lawyers who charge contingent attorney fees or a flat attorney fees are more likely to absorb these costs rather than passing them on to clients.

Paralegal and Law Clerk Time

Paralegals and law clerks often perform most of the clerical duties required of attorneys. This helps attorneys to focus on the legal issues rather than the clerical issues in legal matters.

For example, a paralegal may put together a draft for a petition based on a petition prepared for another client and give the draft to the lawyer. The lawyer may then edit the petition to tailor it to the client’s specific needs. This can be a very efficient way for the lawyer to turn out legal work product. This raises the question as to whether the attorney charges the client for their staff’s time.

The majority of attorneys do in fact charge clients for staff time. The billing rates for legal staff are significantly lower than the attorney rates, so this can help reduce client legal bills. There are a number of attorneys who do not bill for staff time at all. These attorneys may be passing the work of their staff off as their own and billing their hourly rates for this work. Other attorneys may in fact not bill for staff time.

As with out-of-pocket expenses, attorneys who charge hourly fees are more likely to pass these costs on to clients rather than attorneys who charge contingent or flat attorneys fees.

Legal Research Costs

Attorneys perform legal research and they usually charge their hourly rate for performing this service. When attorneys perform legal research, they are usually using an online legal research service. These services can be quite costly. The costs have decreased as of late.

Traditionally the leading online legal research services charged lawyers transaction fees as they performed the research. This made it possible to identify and track the research expenses to specific clients. Many of these online legal research services now offer their tools to lawyers on a flat monthly or annual subscription basis. This makes it difficult to track research expenses to any one client.

Some attorneys still use the old billing plans for online legal research. These attorneys will typically pass the costs of the research on to their clients. Other attorneys view this as yet another cost of doing business – one they pay out of their own profits, rather than charging clients. The trend seems to be for the lawyer to absorb these costs.

Conclusion

Clients should ask their lawyers what fees the lawyer charges before they hires the lawyer. The client should be very specific in asking whether out-of-pocket, legal staff time, and legal research costs are included in the attorneys fee or if they are charged to the client separately. Avoiding these costs can help reduce the legal bills the client will eventually have to pay. Another way to reduce legal bills is to make a sizeable advance payment. The next installment of this article will discuss this very issue.