How do lawyers get paid?
In case you had never heard this piece of advice, always read a contract before you sign it. The contract you have with your lawyer should explicitly map out exactly how and when (or if) your lawyer gets paid. This is a means of agreeing on these details so that you and your lawyer can get down to actually fighting your case.
Unfortunately, this tends to be an issue sometimes, so let’s discuss what one may expect when they hire a lawyer.
Contingency fee
Typically, lawyers work on a contingency fee. This means that they only get paid if the homeowner gets paid, which is great for you. This ties the lawyer to the homeowner until the case is resolved. It is unusual, although not impossible, for lawyers to bill hourly for their work or require a retainer up front to start work. This means the lawyer does not make a dollar until the case settles or goes to trial.
The even sweeter deal for the homeowner is that when a case does go to trial and if you do win, this contingency fee usually doesn’t come out of your pocket, but your insurance company’s pocket.
It costs to be a lawyer
This does mean that many lawyers do not get paid – many lawyers work cases for years without getting paid! If this weren’t bad enough, working cases do come at a cost for the lawyer; every cent that is spent on getting information to support your case comes out of your lawyer’s pocket.
The biggest expenses of course is hiring experts. The lawyer will typically pay for all these experts and other costs out of his own pocket for his client in hopes that the case can settle or he can win at trial. Again, if the lawyer does not win at trial, he will not only not make a fee but will lose the money he spent preparing the case for trial. These costs are separated in most fee agreements and are reimbursed in addition to the lawyers fees as these costs do not make the lawyer money, they simply reimburse him for the money he spent on behalf of the client.
Understand your lawyer’s contract
Generally, most fee agreements are going to be rather similar but there can be some variances to these agreements. Most importantly, if you do not understand what the agreement says, ask your lawyer before signing and actually read it. It is better to understand how the process works than to be surprised at the closing table when your case is complete. It makes life easier on the lawyer and you.
Agreements do fall through at the last minute when clients realize they did not understand the contract at the last minute. This is a waste of everyone’s time, money, and energy, so always read and make sure to understand a contract before you sign it. If you don’t understand, ask!
