Business issues are one of the most common reasons people seek legal representation. There are really two types of business attorneys: transactional attorneys and litigation attorneys. Transactional attorneys may handle mergers, acquisitions, and business entity formations. They draft important legal agreements but do not often appear in court.
Clients turn to business litigation attorneys when they have legal disputes they cannot solve on their own. These range from conflicts within the company ownership and management, such as partnership and shareholder disputes, to disgruntled employee claims, including wage and hour, wrongful termination and harassment. Claims may also arise from outside the company, such as contract disputes with third-party vendors and dissatisfied customers. Because litigation can potentially end a business, owners hire litigation attorneys to become their biggest advocates. Saving their business equates to ensuring that the owner will continue to have the means to provide for their family.
People may see the need to hire an attorney long before they take action to do so. This may be because they’ve never worked with legal counsel before or because they are concerned about the cost.
How Do Attorneys Charge Their Clients?
There are several ways in which attorneys may structure their fees. The type of fee structure is a reflection of both the attorney and the type of case. Here are some of the most common forms:
- Flat fees
- Hourly rates
- Contingency fees
- Hybrid fees
Attorneys who charge flat fees do so for cases where the attorney understands the scope of work and how much work it involves. Estate planning attorneys who draft wills may use this payment method because they have command over the process and what needs to be done. Family law attorneys may also use this for uncontested divorces because fewer variables and negotiations are involved.
Hourly rates are prevalent, and some attorneys bill in portions of an hour. Whereas an attorney preparing and filing Articles of Incorporation to create a legal entity for a client could warrant a flat rate, a contested legal dispute —i.e., business litigation—would most often lend itself to an hourly rate. These cases present complicated legal issues and strategies, and due to the number of variables involved a case can take months and even years to resolve through the court system. Business litigation also often involves cross-claims and insurance coverage disputes. Furthermore, it is essential to note that lawyers within a firm may charge different rates. It is appropriate to ask an attorney what their hourly rates are and even how long they expect the case to take.
Although most business litigation attorneys will not accept cases on a contingency basis, medical malpractice and personal injury lawyers commonly use these arrangements. The client will benefit from having legal counsel represent them without paying any initial costs. The attorneys only receive compensation if they are successful in obtaining a settlement.
One of the disadvantages of a contingency rate is that it may create a circumstance where the attorney has to choose between receiving a settlement (and a guaranteed payment) or taking the case to a trial.
Hybrid fees often combine the benefits of hourly rates and contingency fees. Under this model the attorney agrees to discount his or her hourly rates, but requires a reduced contingency fee to make up the difference. This arrangement means both the attorney and the client have “skin in the game.”
The Foldenauer Law Group Mindset
The attorneys at Foldenauer Law Group have a straightforward solution: always pursue the course of action that is in the client’s best interest. By always putting the client’s interest first, we believe we consistently achieve better results. Contact Foldenauer Law to schedule a consultation regarding any issues regarding business disputes and serious injury litigation.