Steve Palmer [00:00:00]:

Steve Palmer here again with another episode of Lawyer Talk podcast Q and A edition. This week, we have a question from William. He says, hey, Steve. I am in the process of hiring an attorney for my son's felony case. His lawyer says his fee is a flat rate no matter what happens. I don't quite understand how this works. What if the case doesn't go to trial? Will the fee be the same? How is that fair? Well, this is an interesting question, and I get this a lot because, obviously, I do criminal work and we charge all sorts of different kinds of fees. I'm gonna try to break this down.

Steve Palmer [00:00:30]:

I'm gonna do this from an Ohio perspective, and I I don't know where this question is coming from. But for in Ohio, and I think this is probably pretty similar everywhere else, but check your local bar associations to see. But in Ohio, here here's it is very common for criminal defense attorneys to charge a flat rate. Meaning, if somebody comes into my office and they have a DUI case or they have a felony case, I would say it's gonna cost x amount of dollars, and we'll just say $5,000 fee, for, like, just for round numbers. And then the next question is gonna be, alright. What does this cover? And that's a great question. I think that's sort of what we're getting at here. In other words, what if the case gets dismissed tomorrow and you've paid an attorney a $5,000 fee? Can the attorney still keep the fee? Or maybe let's look at it the other way.

Steve Palmer [00:01:16]:

What if the case goes to, each you pay attorney fee. Somebody pays me $5,000, and then two days later, there's another indictment or more charges, and it gets far more complicated than originally we thought it would be. And is 5,000 gonna cover it? The answer is it all depends. It's all in the details. And, typically, there's some sort of I guess this is important. Typically, there's some sort of written agreement. And that could be a a formal fee contract, and lots of jurisdictions require that where both parties sign. I do that a lot.

Steve Palmer [00:01:46]:

Sometimes it's an engagement letter where I talk about the fee with somebody, and then I send a letter called an engagement letter that basically outlines what we talked about and asks the client to let me know if their recollection or if they have any, different thoughts on it, and then we can renegotiate. But, typically, it should be in in writing in some way, shape, or form. In Ohio, it doesn't necessarily have to be, but it gets really sort of dicey when there's a disagreement on it. So first of all, get it in writing and read the small print. The bar associations around the country have different standards and formats, and lawyers use different standards and formats, but they're all pretty much the same. They spell out answers to these questions. So for instance, if I charge somebody a flat rate fee, I will almost always tell them face to face and in my written agreement, look. This is $5,000 based on what we talked about today.

Steve Palmer [00:02:35]:

And I'm estimating that fee, because I've done this for almost thirty years, and I sort of know what kind of work is gonna go into this. And maybe the market only bears a certain amount. I mean, even though on a DUI case, I might have more hours if I charge my hourly rate than the flat rate would cost, The market locally just doesn't bear more than $5,000. So there's there's outside considerations that we take into account when we charge fees. But I would say, look, if the case goes away tomorrow, I'm not gonna keep your $5,000. I'm gonna go back and look at how much time I have in it and and, discount the fee, commensurate with what I did. I know there's lots of lawyers who don't do that. They keep the fee, and they end up in the bar association or in their local supreme courts, with fee disputes.

Steve Palmer [00:03:22]:

And to me, it's just not worth it. My mentor always said, always do the right thing with the money. And I've always followed that guidance because it's just not worth it. Look. We if as a criminal defense lawyer, as if you're a lawyer out there, you don't you don't need those kind of negative, comments out there, particularly in social media days or even in in rep with your reputation generally. So always do the right thing with the money. Now the other side is also true. If I get into a situation where the case gets far more complicated, I've only charged 5,000, I always leave wiggle room in my fee agreements and in my engagement letters to say, I reserve the right to increase this fee, commensurate with the amount of work that is that I didn't expect.

Steve Palmer [00:04:03]:

So if we end up in a multi week trial on a case that should have been done in a day because there's more charges or whatever, you know, you can't expect your attorney to work for less than fair market rates, in that situation because, clearly, that was not contemplated at the time of the agreement. And then you get into some other nuances, types of fees. You know, sometimes what I'll do is a hybrid fee. I'll charge somebody hourly. So they come in and they say, look. I'm under investigation, for some sort of crime, and I don't know what to do. And they engage me. They hire they wanna hire me to help them work through the police investigative stages of the case.

Steve Palmer [00:04:42]:

And what I'll do is I'll tell them, look. I'm gonna take a retainer fee. And in my world, retainer fee means I'm gonna take money, say, the same $5,000. I'm gonna deposit that into what we call in Ohio, an IOLTA, which is a trust account. And it is, it's basically an account that we have to have as attorneys, and it's the client's money. As soon as it becomes my money, as soon as I work and earn the money hourly, I have to disperse it back into my general operating account. But I can't commingle client funds and my funds in my trust account. So they hand me the $5,000 I deposited into my trust account, and I work hourly at a typical hourly rate.

Steve Palmer [00:05:23]:

And if during the investigative stages and, let's say, two days later, I've got two hours in and I build that two hours of time, and now the case is formally charged. The investigation is over. And I tell my clients, look, the investigation is over. Now we're gonna try to I'm gonna give you an estimated flat rate fee on what I think this case will cost going forward. Now that we know what the charges are, now that we know the scope of work that we can at least have a pretty good idea what it's gonna be, I can give you a flat rate. And, you know, I guess this sort of demands the next question, which is why would somebody want a flat rate instead of hourly? I think there's all sorts of reasons for that. One, it gives the client some assurance that they know what the case is gonna cost. They just know going in, it's gonna cost that.

Steve Palmer [00:06:04]:

Anybody who's ever, I'll say suffered the other side of hourly billing, it can get sort of frustrating because every time you make a phone call, you get a bill for point one hours or point two five hours. Anytime, you get an email, you get a bill. And, you know, sometimes as an attorney, that's the only fair way to do it. On the other hand, it can get unwieldy very quick and, or very quickly. And and I think it's it's good for both sides. We as the lawyers know we're getting paid a certain amount, and the client knows what that amount is. But, again, I always reserve the right to adjust that up and down. The case doesn't go to trial.

Steve Palmer [00:06:40]:

I can lower your fee. If it does go to trial, you can increase the fee. And sometimes I'll say it's a flat rate of x dollars, if we resolve the case, before the trial or at certain days before the trial. But if I have to go to trial, then the fee is gonna be x dollars. I charge a trial fee, typically a flat rate. Now the other thing that comes up all the time with legal fees is expenses. I recently worked on a case where I was out of county for a week, seven full days, or five I said five full business days. And I had a hotel.

Steve Palmer [00:07:13]:

I had per diem meals. I had mileage. I had, my investigator there. We had lots of expenses in the case. And what I do in that situation, I just keep track of the expenses, and I I, bill the client the expenses. Other expenses include, like I said, investigators where I almost always hire a private investigator. He not only helps me investigate, interview witnesses, he helps me put the case together, go through the discovery with me and and brainstorm it. And that has a a cost.

Steve Palmer [00:07:40]:

I don't charge a VIG on that. I don't upcharge it. But I pass it directly to the client, but I bill it through my trust account. The other expenses that routinely come up would be things like, experts. You need a DNA expert. I would typically request, extra money for that. If you need a medical expert, I would request extra extra money for that. And those experts often will ask for a retainer fee and build their own hourly rate against that retainer.

Steve Palmer [00:08:06]:

I do it through my trust account, pass it directly to the client. So it gets complicated. And and I think that the takeaway here well, there's several takeaways. Get on the same page with your lawyer right away. Figure out what the fee is gonna be. Figure out how it's gonna work. Ask these questions. And if your attorney you're talking to isn't answering these questions, ask again.

Steve Palmer [00:08:27]:

If they don't ask if they don't answer again, keep asking till they get an answer or go somewhere else. Because money is, you don't want that to get in the way of the attorney client relationship. I like to know I'm getting paid. My client likes to know I'm gonna do the work. I I I never bury the lead on legal fee discussions. I tell people upfront, look. This is gonna be expensive. If you can't afford it, let's not get halfway into this thing.

Steve Palmer [00:08:48]:

And, you've wasted your money because there's not enough for me to finish the case and, keep going. And I won't even take a case if I if that's the situation. And I'm not doing that to be mean or to be a greedy lawyer. I'm doing that for the benefit of the client because it doesn't help any of us, if we don't have a, an understanding on this. You wouldn't hire a contractor, without knowing all this stuff. And those who have disputes with contractors know exactly how frustrating that is for both sides. Now this is another another question is when does a fee become too reasonable? And most bar associations, Ohio included, we have rules on this. And in Ohio, it's called the Ohio rules of professional conduct, rule 1.5, which basically outlines the following requirement.

Steve Palmer [00:09:33]:

Legal fees have to be reasonable in the community. In other words, they can't be unreasonable. What does that mean? Well, look, here's a list of things that the that the Bar Association would consider or the rule considers. The time and labor required, the novelty and difficulty of the question involved and the skill required, the likelihood of including other employment. Meaning, if you hire me on this case, I can't do another codefendant or another litigant in the case. Customary fees for similar services. Like I talked about, you have, in my community, you can't out price yourself for a DUI. Sometimes people will pay it, but, you know, you gotta be careful there.

Steve Palmer [00:10:10]:

The amount involved, results obtained, and time limitations. So results obtained. So what's the outcome? The nature and length of the relationship with the client, a case, you know, how long have I known the client? What is customary in my billing practice with the client? And the lawyer's experience reputation and ability. So, look, you people wonder all the time why lawyers would charge, like, $500 an hour or even a thousand dollars an hour, because you're paying for their experience. You're paying for their know how. So for me to get something done after thirty years, I mean, I can just jump to the end, and I've got it already figured out because I've done it long enough. And, you know, these rules leave room to be compensated for that. And all these things go into the milkshake blender of considerations on what is a reasonable fee, both either whether it's hourly or whether it's flat rate.

Steve Palmer [00:11:02]:

This was a lot to unpack. But I I hope I answered your question, and I probably created more questions, but that's okay. Send them to lawyer talk podcast dot com. Go to lawyer talk podcast dot com. Send me a question. I get in there all the time. There's a couple teed up that I'm gonna get to here, in the in the near future. But, check us out, lawyer talk podcast, q and a style, off the record, on the air till now.