For many people, one of the most stressful things about divorce is not concern about the outcome of the case itself, but what their divorce attorney fees will look like. Depending on the type of work they are doing, lawyers may bill in a variety of different ways. For services involving a predictable amount of work (like drafting a will) there may be a flat fee. For cases in which a financial recovery is expected (like personal injury), there may be a contingency fee: the client pays nothing if they lose, but if they win, the lawyer gets a percentage (usually 33%) of the award.

For many legal matters, including most divorces attorneys bill on an hourly basis for the time they put into a case. Hourly billing can be scary to many clients because it’s hard to predict how many hours a case will take, and therefore how much it will cost. Learning a little about how hourly billing works in a divorce can help you feel better about working with your attorney, and empower you to keep your fees down without hurting your case.

Hourly Billing 101: The Basics

Every attorney who uses hourly billing has an hourly rate, and so may their staff members. A paralegal’s hourly rate is usually lower than an attorney’s; a new associate’s hourly rate is usually lower than a more experienced senior attorney.

For any given task, you will be billed at the hourly rate for the person who performed the task, times the amount of time it took to perform. Most law firms bill in six-minute increments, or one-tenth of an hour (though some bill by the quarter-hour). If it took your lawyer 12 minutes to draft an email to opposing counsel in your case, you would be billed for 0.2 hours at the lawyer’s rate (fractions of a billing period are rounded up; if it took 15 minutes to draft the email, you would be billed for 0.3 hours).

Most law firms delegate work to the person who can capably do the work at the lowest hourly rate. Some tasks, like negotiating a settlement, require a lawyer’s training. Others, like contacting a court to reschedule a hearing, can be done by staff members. Using staff members that don’t require a lawyer’s expertise frees up attorneys to work on important matters, and keeps your bill down.

When you sign on to work with a divorce attorney, the engagement letter should include a clear description of how billing works (hourly rates, billing increments, how often invoices are sent out, and payment terms). If it doesn’t, ask! This is important information that you have a right to know before committing to work with a lawyer.

You may also be required to pay a retainer when you hire an attorney or law firm. A retainer is a payment you make up-front to secure the lawyer’s services. Retainers are common in divorce and family law cases—more on that in a moment. It works as an advance on the fees you will pay.

What Determines an Attorney’s Hourly Rate?

Many things can affect a lawyer’s hourly rate. Attorneys with more knowledge and practice experience, or a particular sub-specialty may charge a higher hourly rate. The location of the practice also influences hourly rates; you can generally expect to pay more per hour for an attorney in a major metropolitan area than in a suburb or small town.

A divorce attorney whose services are in high demand will usually charge a higher rate than one who is not as sought-after. All of this said, the mere fact that one lawyer has a higher rate than another doesn’t mean that they are a better lawyer.

How Do Retainers Work?

A retainer is an amount of money that a client turns over to the attorney up-front to engage their services. The phrase “turns over to the attorney” is intentional. A retainer does not belong to the attorney until it is earned.

Let’s say an attorney has an hourly rate of $400 and charges a retainer equal to fifteen hours of their time, or $6,000. The client pays the retainer, and the attorney deposits it in their trust account, which holds client funds separate from the attorney’s own funds. As the lawyer works on the case and bills their hours, they may transfer the appropriate amount of fees from their trust account to their general account.

Some lawyers do this and then require the client to replenish the retainer when it dips below a certain amount. This ensures that there is always enough money available to pay the client’s current bill. Other lawyers simply hold the retainer in their trust account, keeping it as a sort of security deposit; clients are expected to pay their monthly bill in full.

Non-refundable retainers for lawyers are not allowed in Minnesota. If the business relationship between an attorney and client ends, and the lawyer has not earned the full amount of the retainer, they must return the unearned portion to the client.

Pros and Cons of Hourly Billing in Divorce Cases

One of the primary advantages of hourly billing is that it’s customized; you pay for the amount of work you received. If you have a relatively straightforward divorce, you’re not paying the same high fee as someone with a complex or contentious divorce.

Another advantage is that it’s transparent. Your lawyer doesn’t just give you a figure and expect you to pay it. The breakdown on your monthly bill (most lawyers bill monthly or more often) will show exactly how the attorney spent their time (and earned your money).

Hourly billing is also flexible. Divorce cases tend to ebb and flow; some months there may be a lot of work and a higher bill, and other months may be quieter. With hourly billing, you pay only what you owe in a given month.

Of course, there are also downsides to hourly billing. The biggest is probably the unpredictability. It’s hard to know from the outset what the final bill will be. Some cases that seemed simple and amicable at first become contentious and drawn out.

If you’re worried about what your final bill will be, don’t hesitate to talk to your attorney. We promise you won’t be the first! Everyone wants to keep their legal fees down. And while you may not have complete control over the final cost of your divorce, by working together with your attorney, you can avoid needless legal expenses.

How to Manage Your Legal Costs

The best way to manage your legal costs in a divorce is by speaking with your attorney before expenses get out of control. Your divorce lawyer can give you the best guidance on controlling costs without compromising your case.

One thing you will probably be able to do is gather documents for your attorney, such as tax returns, bank statements, pay stubs and other financial information as soon as requested. The less your attorney has to track down through opposing counsel, the better.

Another good way to control costs is to communicate efficiently. If you need to convey some information to your attorney, it may take her less time to read an email (which she can then place in your file) than to talk to you on the phone and transcribe her notes. Time is money, so avoid wasting it. Ask your lawyer how she prefers you to communicate.

One of the best ways to save on legal fees in divorce is to reach settlement as early as possible, often through divorce mediation or other alternative dispute resolution. Fighting is expensive, both financially and emotionally. If your lawyer is constantly filing motions or responding to them, going to hearings, and preparing for trial, your divorce is going to cost more. Sometimes, those measures are necessary. Often, they can be avoided.

To learn more about hourly billing in divorce and family law matters, call 763-575-7930 or contact Mundahl Law online to schedule a consultation.