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10 Things Your Attorney Doesn’t Want You To Know, Part 1

lesson learned Dec 04, 2018

Attorneys are vital to the success and continued viability of your school. However, there is always an inherent and unavoidable conflict between you and your attorney. Any time people are paid for a service or you pay for a service, each party will act to protect his/her best financial interests.


Here’s my list of 10 things (some related to fees and some not) that your attorney would rather you not know (or ignore):


  1. All Fees Are Negotiable

I don’t charge the same hourly rate for all types of cases. Litigation is not charged at the same level as would assistance in filing administrative documents.


Let’s be honest. All things an attorney does don’t require similar sets of skills. Similarly, it never hurts to attempt to negotiate a reduced rate. If you’re a new client or even one that has a longstanding relationship, asking for a discount, or even a flat fee, is a possibility. As my father always said, “The answer to an unasked question is always no.”


Finally, if you have chosen a true professional for your attorney, his/her work product won’t suffer because you negotiated a reduced fee. Never let that be a concern. If it is, you have chosen the wrong attorney.


  1. In a Contingency Situation, Pay Fees from the Net Recovery

Some cases, but mostly personal injury cases, are taken on a contingency basis. That means you don’t pay an hourly fee, but the attorney receives a percentage of the recovery. Typically, the attorney agrees to front the “costs of litigation” (filing fees, expert fees, etc.), but will recover these costs from the settlement proceeds.


In my opinion, these costs should never be deducted from the gross recovery but instead from the net recovery.


By way of example, let’s say that you settle a case (or you receive a collectible judgment) in the sum of $100,000. But costs in the sum of $20,000 were incurred. Further, assume that you’ll owe your attorney 33% of the recovery.


If the costs are deducted from the gross recovery (i.e., after the attorney is paid her 33%), this can cost you a great deal of money. The arithmetic is clear.


If the $20,000 is taken from the $100,000 before the attorney receives her percentage, you will receive $53,600 while your attorney will collect $26,400. If the costs are deducted after the attorney’s distribution, the attorney receives $33,333 while your recovery is reduced to $46,667.


In my simple example, allowing the costs to be reduced after the attorney’s percentage is calculated resulted in you receiving $7,000 less. That’s a significant loss to you.


Lawyers won’t explain this math trick to you because it will cost them money. So, negotiate this in the beginning.


  1. Always Review Your Bill

Attorneys hate preparing hourly billings. Typically, attorneys delay keeping contemporaneous time sheets, and only when faced with the alternative of a cash-flow issue do they perform billings. Reconstructing time by reviewing a file or by memory is never as accurate as keeping time as it accrues. If something in your invoice doesn’t look (or feel) right, say something. Waiting or delaying is not a viable plan.


Attorneys make mistakes. Billing errors can occur. Costs can be billed incorrectly. Ask for detailed billings divided into six-minute increments. You are owed this consideration. So, demand it!


  1. We Are Very Possessive of Our Clients

No attorney has expertise in all areas. A good attorney with your best interests at heart wants what is best for you, even if it requires that another attorney be brought in. Don’t hesitate to ask for a referral to another attorney that handles a matter your regular attorney does not.


  1. Experience Usually Always Trumps Pedigree

New lawyers and new drivers are dangerous. Each, unless under the wing of a mentor, can make mistakes individuals with more experience would not make. A failure in this regard could have monumental negative consequences.


A physician that just graduates on a Friday cannot perform open-heart surgery on Monday. But, a lawyer that passes a bar exam can defend a client in any type of case, even a murder trial, before the ink is dry on his/her diploma.


Where your lawyer went to school may get him or her their first job, but it won’t make a bit of difference to a judge or jury. I want the experienced attorney that attended a state law school representing my interests over the highly ranked, recent Ivy-League graduate, every time.


Topics 6 through 10 next month.


Attorney Phil Goss, Jr. welcomes any email comments or questions at [email protected] and will attempt to respond personally, time permitting.


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