What Are the Differences Between Legal Fees and Legal Expenses?
How much a personal injury case will cost is a common question among plaintiffs. Most accident victims are already dealing with expensive medical bills, property damage and lost wages – they are wary about also spending money on filing a lawsuit. There are two main categories of costs associated with a claim: legal fees and legal expenses. While they sound similar, they are not the same. It is important to understand the difference as the filing party.
What Are Legal Fees?
Legal fees refer to the price of hiring the personal injury attorney who is representing you. Legal fees pay the attorney for the time, work and energy spent on your case. Specific prices and fee structures vary by law firm and attorney. You may wish to compare price estimates at multiple law offices before retaining an attorney. The three most common options for legal fees are:
- Hourly rate. As the name implies, this means that a lawyer charges by the hour. Your legal fees will be calculated by multiplying the hourly rate by the number of billable hours the lawyer spent managing, negotiating or litigating your case. Hourly rates can vary considerably, but may be several hundred dollars per hour, depending on the lawyer.
- Flat rate. A flat rate means that the attorney has a set price for standard legal services. Most flat fees are several thousand dollars or more, depending on the case. As long as your case does not have any legal problems or complications, the lawyer’s flat rate should apply. Otherwise, your agreement with the lawyer may have to be updated to reflect the challenges.
- Contingency fee basis. The most common fee structure at a personal injury law firm is a contingency fee basis. With this arrangement, the attorney charges legal fees as a percentage of the overall amount recovered on the victim’s behalf. These percentages typically range from 33 to 40 percent based on the law firm and case. The attorney may also be willing to negotiate the rate of the fee for special cases.
It is important to understand a lawyer’s legal fee structure before hiring the law firm. Don’t be afraid to ask questions about the price of legal fees upfront. Your lawyer should be honest and transparent about how much he or she charges and give you an accurate estimate of how much your case will cost.
What Are Legal Expenses?
Unlike legal fees, legal expenses do not pay for your attorney. Instead, they refer to all of the other costs associated with a personal injury case. They often include:
- Administrative fees (copies, faxes, phone charges, etc.)
- The price of certified copies of medical or police records
- Postage and courier fees
- Expert witness or consultant fees
- Witness subpoena fees
- Court filing costs
- Service of process fees
- Court reporter costs
- Travel expenses to and from hearings
The types and prices of legal expenses in your case will depend on the circumstances. In general, going to trial costs more than reaching a settlement agreement, as a court case requires more work, time and people.
Who Pays for Each?
Make sure you understand the difference between legal fees and legal expenses, as well as who is responsible for paying both types of costs. These are all questions that your personal injury lawyer can answer for you. It is never guaranteed that the other party involved in your case (the defendant) will be ordered to pay your legal expenses or legal fees for you as part of a settlement or judgment award. However, your lawyer will search for all possible ways to keep your case affordable and maximize your financial recovery. A lawyer will work with you to stay within your budget as much as possible while also working toward your goals.