Imagine yourself in two different scenarios.
In scenario one, you are a defendant sitting across from a lawyer’s desk having just explained the facts that led you to become a defendant in the first place. You get really happy when the lawyer looks up and she says “We are willing to take your case and defend you in Court”. The smile slowly wipes off your face when she adds “Our retainer fee is fifty thousand dollars, payable upfront. My hourly rate is four hundred and fifty dollars, and I will need a staff of one associate and one paralegal. So your total hourly fee is eight hundred dollars. I estimate the final cost of trial will be approximately two hundred and fifty thousand dollars”.
A Few Dollars Less
In scenario two, you are a defendant sitting across from a lawyer’s desk when he looks up and says “We are willing to take your case and defend you in Court”. Your happiness grows when he adds “your legal fees will be three thousand dollars”. You get more excited as the realization sets in that you now have legal counsel that you can afford. You think to yourself, “man that other lawyer, she was going to charge me a quarter of a million dollars to do the same job that this guy sitting across from me is willing to do for only three thousand dollars”. You hurriedly sign the new attorney’s retainer agreement, write him a check for three thousand dollars, and walk out confident that your legal problems will now be solved (and confident you weren’t “ripped off” by that other attorney charging you a king’s ransom).
If you are a criminal defendant charged with a major crime and decide to hire the three-thousand-dollar attorney, prepare to go to jail.
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No Trial For Three Thousand, Alex
You are not going to be able to get a trial for three thousand dollars in legal fees. A criminal defense attorney who charges such a small amount is signaling to you his intention to negotiate a plea bargain with the prosecutor. A civil defense attorney is signaling his intention of negotiating a settlement. Either way, your case will not get to the jury.
The bottom line is that lawyers charge by the hour. The three-thousand-dollar attorney is budgeting approximately 7 hours of time to work your case (at four hundred and fifty dollars an hour). The first attorney? She is budgeting about 300 hours of time to work your case with two additional staff.
In the legal world, it takes a lot of time to get work done. And clients do not get to see the amount of behind-the-scenes efforts required of their attorney. The first attorney is being honest about the costs of taking a case to trial.
People rightfully complain that lawyers are expensive. However, the best ones are worth every penny. That is why you will see large hedge funds willing to pay millions of dollars a year in legal fees to get work done. If you are a potential client, you should be wary of a lawyer who offers a fee structure that seems “too good to be true”. In the grand scheme of things, that usually ends up being the case.