There are 4 common types of fee structures:
- Hourly fee: calculated by multiplying the amount of time spent on a matter by an hourly rate.
Example: hourly rate X time spent = fee ($125 X 2.0 hours = $250)
- Contingency fee also known as a percentage fee: an agreed upon percentage of the total amount recovered by trial or settlement. If you lose, the lawyer will not charge you a fee but you may still be responsible or some or all of the cost of the cases (this would be covered in your retainer agreement).
Example: total amount of recovery X agreed upon percentage = fee ($10,000 X 33.3% = $3,330)
- Flat (or fixed) fee: a set fee for a specific legal service, such as drafting a will, filing a simple divorce.
- Statutory fee: a fee set by law, for example, attorney fees in workers compensation cases.