Legal Fees Are Too High!

This newsletter is about a subject that everyone hates: LEGAL FEES.  Everyone thinks legal fees are TOO HIGH.  Here’s why legal fees are high, and what I try to do to keep legal fees down as much as possible.

Legal fees are high because they have to cover a lot of items you never think of, but which are necessary to be paid for the lawyer to be able to keep the doors of his office open.

Law School. After getting through – and paying for – four years of college, the lawyer then has to go through and pay for the three years of mental torture known as law school – where dry subjects like contracts, torts, negotiable instruments, creditor’s rights, secured transactions, taxation, corporations, municipal corporations, wills and estates and the like, are mandatory, but can be so boring as to turn the law students’ brains to stone.  And all this while the cost of paying law school tuition puts the student on a starvation diet, literally.

The Law Office is no different from any small business. The lawyer must pay monthly bills for rent, telephone, salaries, insurance, postage, stationery, career continuing legal education, subscriptions to legal journals and newspapers, among other things.

Free Time. Decent lawyers must spend a lot of time each day keeping current with changes in the law, by reading about new laws and decisions in The Legal Intelligencer, a daily newspaper, and in legal journals dealing with the lawyer’s area of specialization.

Pro Bono Time. Even before the Supreme Court’s order that all lawyers must contribute free time or cash to provide representation to the needy, I always devoted some time to helping some people for free.  Most recently, I tried a case of a quadriplegic person hit on his bicycle by a hit-and-run driver when he was 16, who was suing the Commonwealth of Pennsylvania for payment of expenses which the law required under the old No-Fault Law, but which the Commonwealth just wouldn’t pay until the Court ordered it.

Keeping Legal Fees Down. Everyone expects that, because “the other guy” is at fault, then “the other guy” should pay all legal fees. That would be the case in England.  But in America, each side pays his or her own fees and costs.  So what to do?  If a lawyer wants to work at keeping his clients’ legal fees down, there are several devices that can be used:

Arbitration Clauses. Arbitrations are tried and decided by one or three people, called “arbitrators.” Otherwise, the case has to be decided by a judge and twelve jurors.  For a variety of reasons, the cost of an arbitration trial is about one-tenth the cost of a jury trial.  Therefore, whenever I write or revise a contract for a client, I always add a clause providing that any disputes over the interpretation or application of the contract are to be decided by arbitration.  I also add a clause that the losing party pays both sides’ reasonable legal fees and costs, just as though the English rule applied to the case.  If I am not confident that my client will win, we don’t go to trial.

Paralegals and Associates. Lots of legal work in cases can be done by paralegals and associates (younger lawyers), who work at lower hourly rates.

Candor to the Client. If there’s no basis in the law for a client’s position, I take a deep breath and tell him or her the bad news, rather than “riding the case to trial,” and billing it all the way to a predictably bad conclusion.

Legally Permissible “Fee-shifting.” Some laws allow the court, under certain circumstances, to order the losing side to pay reasonable legal fees and costs.  For example, the UTPCPL, Unfair Trade Practices and Consumer Protection Law, §71 Pa.S. §201.1, ff., lets the court do this, if the consumer can prove that the defendant was guilty of deception.  Fee-shifting is also allowed by the federal civil rights acts, and by many other laws.  It always surprises me how often other lawyers don’t even attempt fee-shifting.

Contingent Fee Agreements (CFAs). Some cases – typically, those with a long, expensive path to trial, but which are fairly likely to lead to a payoff in the end–are  appropriate for a contingent fee agreement.  A motor vehicle rear-end collision, where either the defendant is insured, or the plaintiff (our client) has uninsured/underinsured coverage (“UM/UIM”), is typical of these, where the CFA provides that we pay the costs “up front” (sparing the client from having to “front” this money), which will be repaid to us out of the payout at the end, along with a legal fee that is a percentage of the payout.

FREE INITIAL CONSULTATION. If your legal work can be covered by a contingent fee agreement then there is NEVER any legal fee until the end of the case, when it can be painlessly paid out of the insurance settlement.  In all other cases, I give the first half-hour’s work free (I figure it takes a client that long to decide that he/she doesn’t hate the lawyer’s guts), and if I can wrap up the client’s case in an hour, then I forget about a legal fee.

Contact Our Office at 610-565-9800.


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