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Good attorneys can be expensive; but their guidance is often invaluable. The key to keeping your costs down while still getting great legal advice is to understand how fees are calculated and how you are billed.
When you hire a lawyer, the lawyer should provide you with an engagement letter (also sometimes called a fee agreement or retainer agreement). The engagement letter should explain how you will be billed, the billing rate, and any additional costs you are expected to pay.
Traditionally, lawyers bill by the hour for most legal matters. However, law firms are increasingly amenable to a variety of alternative fee arrangements. Here are some common ways that lawyers charge for their time.
Most attorneys require a retainer. A retainer is money advanced by the client and placed in an escrow account; the attorney then draws funds from that account as services are rendered or costs are incurred. When the amount in the retainer account is drawn down to a certain level, the client must add additional funds. (Think of a retainer as the lawyers’ insurance that they will be paid for their time.) Funds placed in retainer are almost always refundable if not used.
You can also expect to be charged for the following:
Now that you understand how you will be charged, let's look at ways you can keep those costs down while still receiving great service: