October 2018

Attorney Fee Agreements In The Evolving Legal Profession

As technology advances, individuals seeking legal help have more access to legal resources. This access beyond attorneys and law firms changes the landscape of legal fee agreements. This article discusses the evolution of fees and agreements for lawyers.

Technology has increased our access to information, and this open access has changed the availability and delivery of legal services. Now that there are various resources outside of law firms, the way that clients seek legal help is evolving. Clients of all types have more options depending on their legal needs – they can pay for an attorney who works on a case from start to finish, or they can seek out less hands-on resources for more straightforward matters. As the scope of representation changes, the attorney client fee agreement changes with it. Below is a discussion of the latest range of legal services and the fees that clients can expect to pay for those services.

A fee agreement contract sets out the fees to be paid and how those fees will be paid. Depending on the service provided, a lawyer fee agreement may involve contingency fees, hourly fees or flat fees. With a contingency fee agreement, a client that is seeking money damages but is unable to pay an attorney upfront agrees to pay the attorney a percentage of the awarded damages if he or she wins the case. A traditional sample attorney fee agreement will set out an hourly or “portion of an hour” rate for the attorney ($100 to $300 or more), and sometimes a paralegal or legal assistant as well, to handle all aspects of a case. Flat fees, or single fixed fees, are becoming more popular as clients have more options for legal services. While flat fees are convenient, they are typically only offered for simple or “limited scope” help. These can include wills, uncontested divorces, document preparations or any other straight forward legal matter.

For low-income clients or nonprofit organizations who serve those with limited means, legal services may not be subject to a fee agreement. For these pro bono cases, the services are usually provided at no charge or at significantly reduced rates by volunteer lawyers. If there are legal expenses to be paid, they must be minimal, and the lawyer agreement should be clear about any fees involved. In some instances, pro bono clients will pay a discounted rate or will be asked to pay reasonable court costs. Unlike clients with contingency fee agreements, though, pro bono clients do not have to pay their attorney a portion of their awarded damages. The American Bar Association (ABA) Model Rule 6.1 states that a lawyer should aspire to render at least 50 hours of pro bono legal services per year. Many state bars also have similar requirements or suggestions when it comes to pro bono jobs for attorneys. It’s important to check your local rules, as some bar associations may still require a retainer agreement, even if there are no attorney fees, stating the legal services will be done free of charge.

With the help of cloud-based software, low-income clients also have the option to have court documents prepared for them without a lawyer. For pro se litigants who are unable to afford an attorney, resources like Access to Justice (A2J) Author can assist them in filling out court forms. Clients can access A2J Author’s interactive forms through different state-wide DIY program websites. They are then asked a series of questions so that the A2J Author software can assemble ready-to-file court documents for their legal needs. This option eliminates the legal fee agreement, as A2J Author is free to qualified litigants as well as courts and legal service organizations.

A2J Author an example of how the growth of Artificial Intelligence (AI) is bringing more changes to the delivery of legal services, and with it, changes in legal fee agreements. There are also legal AI services being released for practicing lawyers. These tools are used by law firms for due diligence, research, discovery and more. This offers attorneys an opportunity to increase their productivity and thus should be a factored in when creating legal fee agreements for clients.

For clients who don’t qualify for pro bono services but can’t afford a lawyer’s hourly rate service, law firms offer “unbundled” services. To reduce the fees in an attorney client agreement, attorneys can provide unbundled services by agreeing to limit the scope of representation. Unbundled services are typically done with flat fee pricing. For example, a client can pay a fixed fee for an attorney to only appear and represent him or her at a mediation. Another client might just need an attorney to draft specific documents, so that client would pay a flat fee for that limited service only.

Alternatively, clients can purchase documents or advice online in lieu of paying for an attorney’s full-time service. These services are available for those who need basic contract drafting/review and brief consultations. Several websites offer packages with resources for estate planning, starting a business and intellectual property protection. Clients can buy these services per document or consultation, or in some cases by paying a monthly or yearly fee.


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