Why You Should Consider Attorneys with Payment Plans
Choosing Attorneys that Offer Payment Plans for Family Law Matters
You may not be aware that in most cases, attorneys cannot be paid on contingency and you generally cannot use a credit card to pay the retainer. Most importantly, it is illegal for an attorney to do work without being paid for that work or to finance legal work with a client.
Finding a family law attorney that will do work on a payment plan greatly increases the likelihood that at the end of the matter all of the work will be paid for. We also believe that you are more likely to follow through with what your attorney tells you to do when you pay for that work.
We also encounter, on a daily basis, clients who have retained other attorneys to do work, and then are unable to pay that attorney either for the initial retainer or for the work that is done. We are forced to refuse to help that person – even if that person is a close friend or a family member. We refuse because the ethics rules allow us to represent only one party in a case. If the first attorney is owed and unpaid, we cannot represent you, without the first attorney’s permission. And very few attorneys will agree to split a fee.
Many of our clients are single parents who are spread very thin financially and emotionally. Although they may receive a substantial tax refund at the beginning of the year, that money is generally earmarked for a new car or braces for the kids or perhaps to make up for a shortfall in last year’s spending . In reviewing our clients’ monthly expenses, in addition to their rent or mortgage payments, we see costs for cell phones, car payments, car insurance, student loans, daycare and pre-school, children’s activities such as soccer, baseball, ballet, gymnastics and so forth. When the costs add up, it is easy to see how money becomes tight. Paying for an attorney who has provided a $2,000 retainer and then has begun to work diligently on the case can feel just as consuming.
So, how do we help you? We allow clients to work off their retainer through legal work and to pay off the balance on a monthly basis, and when their retainer is exhausted, to pay by the hour. We negotiate that payment plan on a case-by-case basis, depending on the client’s financial situation. We charge a flat rate for mediation for full day sessions, in which you have the opportunity to resolve issues at a much lower cost than if you each had to pay an attorney by the hour to prepare for and attend a series of meetings. We include a lot of additional services under the flat rate, from a financial checklist to referrals to local resources, to writing a letter to your ex-spouse to find out how the kids are doing at school.
With a reasonable payment plan, you and your ex are much more likely to take the necessary steps so that your divorce can get done. That means that you will both be able to move on with your lives and spend some of that money on your family rather than your attorneys.
Common Forms of Payment Plans
Typically, attorneys from various personal injury or family law firms, offer at least one or more of these payment structures to its clients in need of financial assistance for their legal cases.
- Installment Payments. With an installment plan, a client will be required to pay a retainer fee upfront, usually due immediately upon commencement of the attorney-client relationship, but can also be spread out over the course of the representation. The balance is then paid through stipulations, where you will provide a series of checks to the attorney, which will be deposited at certain intervals until your invoice reflects the total retainer fee paid. You should require a stipulation that the retainer fee is for a specific purpose and any additional fees will have to be awarded in a separate proceeding. If the stipulation does not include this, the attorney can charge you additional fees. This payment structure is most commonly seen in family law, and depending on the firm, interest may be charged.
- Retainer Fees. A retainer fee often is considered an advance payment against future services. It is usually paid to secure the services of a particular attorney and to cover the initial legal fees and costs. Generally, upon hiring a new attorney, a retainer fee is paid in full, with an agreement to be charged against that retainer for the work to be performed. On a flat fee arrangement, the retainer is paid in full and is deposited into a special escrow account. The attorney withdraws the fees out of this account as they are earned; therefore, it is important to keep track of the retainer fees utilized and ensure that you understand how your case is progressing.
- Flat Fees. A flat fee is a one-time fee, which means you pay that one set fee before the service is performed. It does not matter how much work the lawyer actually must do to finish the job. This is a money-saving option because the lawyer must show up and show that he or she earned every bit of it. Flat fees do not, however, cover expenses or payments made to third parties (such as filing fees, which are paid between you and the court). For example, if you hire a lawyer for a flat fee of $5,000 and your case requires extensive trial preparation and court appearances, the lawyer may be obligated to charge an hourly rate for those services.
If you have questions, ask. An ethical attorney will be transparent and communicate with you what his or her fees are, so you can make an informed decision. Do not be afraid to ask, and do not make assumptions. After all, the only stupid question is the one that goes unasked.
How to Locate Family Law Attorneys with Payment Plans
Online directories are a good place to start. Most major online legal directories will allow you to search per practice area, city, and/or state. To use an online legal directory, go to the directory website and type in the information for your query. If you’re trying to locate a family law attorney, for example, type in "family" under the practice area field. Then, you’ll want to modify the location settings in order to narrow the field down to the most relevant results. Of course, you could also search by location, first, and then refine the results by practice area. Either way is fine; choose whichever method seems more natural to you.
Another good source for finding family law attorneys who offer payment plans is the American Bar Association (ABA). The ABA maintains an online directory of all its members broken down both by city and by state. I’ve found it to be a very good resource for finding relevant attorneys when I’m conducting my own searches. Try searching the directory by city/state combination, such as "Phoenix, AZ," or "Austin, TX," to start.
You can also read reviews to help you get an idea of which family law attorneys have positive customer feedback regarding their payment plans. Most people will tend to comment on payment plans if they have strong positive or negative feelings about them. You can usually find relevant reviews for a specific family law attorney by searching online for reviews for that particular attorney. You can also look up reviews for a family law firm with more than one attorney to find which attorneys are getting the most consistent positive reviews about their payment plans.
Some common questions about payment plans that you might consider asking during a consultation include:
If you’ve already spoken with the family law attorney during the consultation, you can also ask your questions over the phone or in an email. Most family law attorneys will be more than happy to answer your preliminary questions, as well as provide you some insight into their general business practices.
Payment Plan Questions to Consider
In addition to considering the overall value of hiring an experienced lawyer, potential clients should inquire about the presence or absence of any repayment plans. Here are some common questions to ask:
How much interest will I pay? Many lawyers offering payment plans charge interest on the balance owed. In some cases, the lawyer’s fee agreement (contract) states that the lawyer will be entitled to charge a higher interest rate than what a bank would charge for a personal line of credit. This may discourage you from financing your lawyer’s fees . Since the interest adds up, spreading out payments also means paying more for your attorney’s work.
Do you offer a discount for a lump sum payment? Your attorney should inform you if he or she charges a discount for paying the entire fee at the outset.
Are there any fees or penalties for late payments? Some lawyers charge a flat fee for the entire invoice, but charge high fees – sometimes as high as 5% of the outstanding balance each month- for payments made over time. If you anticipate needing to make payments over time, such a lawyer may not be the best fit for you if you want to avoid unnecessary fees.
Pros and Cons
Finding a family attorney that allows flexible payment plans is a benefit for many, but it is also important to ensure that a plan is right for their situation. Payment plans can benefit clients in several ways, including:
- People wishing to hire a divorce attorney can break down their payments to fit within their budgets.
- People can afford high-profile attorneys who have reputations as the best in the area without breaking the bank.
- Clients don’t have to waste time trying to secure funds for a retainer when their partner has cleaned out joint bank accounts.
Clients need to be aware of how a payment option can help them to make payments they may not have been able to other times. However, clients should consider several things before entering into an attorney payment plan. The client should ensure that the amount of debt isn’t too large for them to pay. The client should also keep in mind that the firm will file a lien on their case when they enter into a payment plan. That could impact the way the case is handled if their case involves the division of property and assets.
Success Stories
A mid-30s client recently walked into my office with a 2 year old child, and discussed the divorce process and how her husband could not contribute one single dollar to pay for her retainers. He was unemployed, she was unemployed, and even the child’s grandparents were unable to assist. Mom had a masters degree, however, that was on hold while she re-entered the workforce and regained stability after such a traumatic event as a divorce. The retainer required was $3,500.00. She was unable to pay, but we worked out a payment plan, with upfront payments, and she was able to pay the retainer. A year later, the case is resolved, the retainer was paid in full (with interest) and the family will be just fine.
Another recent example involved a client of mine who was seeking a modification of parenting time, but could not afford the retainer required to meet with the attorney . This client was in the middle of a tumultuous custody dispute at the time of our first meeting, and needed the attorney to counsel him on what to do. The husband had been an outstanding litigator and pro se defendant, but the client really needed counseling nonetheless. We spoke, and I arranged for the payment plan required to meet the retainer. The client was discouraged that he could not pay the full amount up front, but again, our payment plan worked out perfectly and the case went to trial and is now settled.
Flexibility saves families. A year ago I represented a client who was self-employed, and was not able to pay retainer upfront. Again, we set up a payment plan, and in the end, we received the retainer, and the results were favorable for the client.
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