This is the most common way lawyers charge clients for their fees when working on their legal matter. The law firm bills an hourly rate for each staff member working on the client’s case. The lawyer and client agree on these hourly rates before the representation begins. Time spent on your legal matter is often billed to you in tenth or quarter hour increments (for example, the minimum billed amount of time is 6 minutes when billing a tenth of an hour, and 15 minutes when billing a quarter of an hour). Most lawyers will require a deposit or “advance” from the client for the estimated fees and costs of the case that the law firm will bill against.
When a lawyer uses the billable-hour fee, the client should ask the lawyer to estimate the number of hours needed to complete the legal matter. That way, the client has some idea of what they can expect to spend, “all in”.
Lawyers also bill court and other costs separately, and may ask for these estimated costs up front as part of the deposit. Ask the lawyer to advise you on all estimated costs for your legal matter.
Lawyers who take an “advance” or deposit from a client must deposit these “unearned” funds into a client trust account that is monitored by the state bar or other licensing board. In Texas, we call this an IOLTA. A lawyer must account to their client for how the deposit is spent. This is usually done by sending the client a detailed invoice with a breakdown of their time and expenses. Some lawyers may send invoices more frequently while the legal matter is “active”. This helps the client understand how quickly the deposit is being spent.
PRO: The client pays only for the time the lawyer and their staff actually spent on the case. If the lawyer is efficient with their time, or the client’s legal matter is simple, the client pockets the savings!
CON: When a legal matter is contested, it is often difficult for a lawyer to estimate total fees and expenses. Fees and costs can quickly increase based on the complexity and direction of the legal case, especially when there are multiple parties fighting. In this situation, the client has no certainty concerning the total cost of their case. They may need to settle sooner, or for less than what they originally wanted. Sometimes, the client may have to drop their claims entirely if the legal fees and costs outweigh the benefits of the contested litigation. It’s important to research your legal matter, and the reputation of the attorney you hire for a contested legal matter.
