What Does a Contract Lawyer Cost?
While contract lawyers are highly specialized and may charge significantly more than those providing general legal services, fees can still range widely from lawyer to lawyer. For example, for a recent project on LawClerk, two different contract attorneys provided quotes for the same job. One quoted $200 per hour and the other $75. Some factors that will impact the cost of hiring a contract lawyer include: Geographically, rates for contract attorneys tend to be concentrated in three general ranges, according to data from Lawyerist. 22% of contract attorneys are in the $50 – $100 range. 20% focus their practices in the $101 – $150 range. 14% are in the over $200 range. While adoption of the contract attorney model is widespread across the country, the majority of contract lawyers work in large cities, which is a trend we have also seen at LawClerk. In fact, the top three markets among our attorneys are Los Angeles, Chicago and New York. Lawyers have different opinions regarding what constitutes a complex contract . For a land use attorney constructing a complex zoning consent judgement for a major downtown development, this contract may take several hours and several hundred dollars to complete. However, for an experienced trust and estate attorney, the same contract may only take 15 or 20 minutes to review and prepare an opinion letter. Overall, the range of skills and backgrounds of contract attorneys will greatly influence the price of hiring one. If an attorney is a new solo practitioner fresh from law school, they may charge at or a little below the average local rate in hopes of gaining experience. Senior attorneys may charge more for the experience and expertise they bring to the project. Human estimation is also required when it comes to certain contracts which may require significant handholding or clarification from the client. Finally, those who consistently deliver high quality work to clients will often command higher fees just as all professionals do.
Average Contract Lawyer Fees
There are two ways contract attorneys are typically paid—hourly and flat fee. The former is far more common, but the use of flat fees is steadily rising as larger law firms, in order to be more cost-competitive with alternative legal service providers, recognize the need to be flexible in responding to the expectations of their clients, offering cost and budget predictability as part of that responsiveness.
For both hourly rates and flat fees, the law firm typically pays for a contract attorney’s training, professional development, malpractice insurance, health benefits, paid time off, and technology support.
Hourly rate: The hourly rate for contract attorneys can vary widely from $20 per hour (a low end that one firm indicated it would only pay for basic, simple-level work) to upwards of $75 per hour. The average hourly rate for contract attorneys is $45 – $50 per hour. As contract attorneys gain experience, they can expect their rates to increase by as much as 25% to 50%. The average hourly rate charged by contract attorneys generally depends on the size of the firm, and will be higher if the firm that hires them is on the larger end of the spectrum (150-200 lawyers).
Flat fee: Firms tend to pay close to the same hourly rate for contract lawyers as they would for standard associates. The average flat fee for contract attorneys is $1,000 to $2,000 per week. For long-term assignments, the standard flat fee will often be reduced to between $1,000 and $1,500 per week. While one firm reported paying a flat fee of $2,500 per week for long-term assignments, the majority of firms believe these figures are too high for extended assignments and are more in line with the average of $1,000 to $1,500 per week.
Some firms do not use contract attorneys because they are unable to bill out the cost to the client. One concern that some firms raised was that they risk self-funding a contract lawyer on a matter for which they are unable to bill the client. This downside is an issue that most firms with an active temporary attorney program have found to be manageable and controllable.
It is uncommon for contract lawyers to work at the partner level. Although numerous large firms do utilize contract attorneys, and some have relatively large contract attorney departments, we were surprised by the number of smaller, regional firms that do so as well. These firms range in size from 30 lawyers to 80 lawyers. In addition to the firms we surveyed, other firms that utilize contract attorneys include: Hughes Hubbard, Lowenstein Sandler, Weil, Gotshal & Manges, WilmerHale, Dechert, Fried Frank, and Proskauer Rose.
Contract Lawyer Hourly Rate vs. Flat Fee Pricing
When it comes to the cost of hiring a contract lawyer, there are typically two different pricing models in play: hourly and flat-fee. Understanding the benefits and drawbacks of each will help you determine which method of payment is more appropriate for your needs.
Hourly billing for contract lawyers is what most people think of. Here are some of the features and benefits: Of course, that being said, there are also drawbacks to hourly fee arrangements: If you prefer, or if the scope of your legal work is appropriate for it, you can also pay a contract lawyer on a flat-fee basis. Advantages of the flat-fee arrangement include: The disadvantages of flat-fee contract lawyer billing arrangements include:
Additional Costs to Look Out For with Contract Lawyers
Many clients walk into their first meeting with a contract lawyer and inquire only about the flat fee that was indicated in the lawyer’s advertisement. What some clients don’t realize is that there may be numerous other costs and fees associated with the performance of legal work that may not be included in the flat fee. As with any professional, it is appropriate to ask what other expenses will be billed to the client. These additional costs can be broadly broken down into the following categories:
Consultation Fees
Most reputable contract lawyers do not charge a consultation fee for an initial meeting, where the lawyer will spend approximately 30 minutes interviewing the client in order to determine what the scope of work will be, and to assess whether the lawyer will be able to assist the client to complete the assignment. However, if a significant amount of extra time is spent on this meeting or on preliminary phone conversations, a small fee may be charged to cover this time. In most cases, however, this fee can be waived in the event that the lawyer is ultimately selected for the assignment.
Retainer Fees
Although not as necessary when hiring a contract lawyer as it may be when hiring a firm or an independent practitioner, some contract lawyers will ask for a retainer fee on an hourly basis or as a flat amount that will be applied to the final bill. Although the retainer may be refundable against the final bill , it may be necessary, depending on the scope of the assignment, that the lawyer ask for a retainer at all.
Document Filing Fees
If the contract lawyer is not working at his or her own firm, then filing documents with the clerk’s office may have additional costs. In addition, certain documents may be required to be certified by a clerk or court staff, if filed with a court of justice or the land titles office. In some provinces, the cost to get the documents stamped by the court or government staff may be the same whether or not the contract lawyer or the firm employee files the document. In such a case, the fee simply becomes the cost of the filing, whether or not the client’s regular lawyer performs the filing service.
Extra Costs for Administrative Support
Depending on the nature of the assignment, the contract lawyer may need to use administrative support either at her own firm or at the law firm where she has been contracted. If the lawyer has to prepare documents on the computer, and then print out copies, then get an assistant to sign the documents, and then copy them or fax them, there are extra costs associated with this time spent. These costs may be passed on to the client. Depending on the number of required copies, and how quickly you need them, copying and faxing costs can sometimes add up.
Tips for Saving Money When Working with a Contract Lawyer
To minimize costs, it’s wise to negotiate the terms of engagement for services with the contract lawyer. Before negotiating, be sure you understand the work to be done and get some estimates from other attorneys or contract lawyers as well.
When hiring a contract lawyer, take an active role in the case. When billing hourly, most contract lawyers charge for every minute they spend on a case. If the client saves the contract lawyer time, then the client saves money.
So, how can a client save time for the contract lawyer? Here are some ideas:
Don’t waste time on details of little importance. When there is little urgency or import to the issue, don’t ask for it to be handled immediately. Let as much time pass as necessary before it is booted on the contract lawyer’s plate.
Be diligent about scheduling. I’ve had circumstances where a client will schedule my time to speak with the contract lawyer at 1 PM, but will give only notice the contract lawyer at 1:30 PM. I end up waiting until the scheduled time at 1:00 PM on the phone, but have to bill the full hour after.
Additionally, sometimes clients will not reply to an email until many days after an issue has arisen, when they could have answered that a few minutes after the email request was first sent. As result, they incur several hours of billable time instead of just 15 or 30 minutes. The same is true of other communications.
Grouping time-consuming tasks together is a good idea of saving time and legal costs. On my last few renewals, I used the same contract lawyer to file all the applications, and did so by sending them all in one correspondence. The attorney spent some time reading the Repeat Theatre license code, but did not spend nearly as much time if they had billed for each application separately.
Be upfront about non-essential work. If a contract lawyer is charging hourly, sometimes clients will ask them to review a matter but don’t ask for substantive changes. At an hourly rate, this can quickly add up to an exhausting bill. In some cases, I will offer to make some notes instead of a detailed analysis if that’s what the client desires.
At the same time, not all work can be accomplished by the client themselves. Many times, clients will seek the most minimal legal involvement to their projects. The problem with this is that the contracts will not be thoroughly checked when the client does not pass the proposed changes by their contract lawyer. As a result, the contract lawyer cannot be liable for the language within the contract.
With regards to tax or regulatory agencies, oftentimes setting up the compliance structure for operations can come at a high price due to the amount of work that must be done. Therefore, it’s best to consult the contract lawyer early in the project, if possible, to avoid excess fees.
When Hiring a Higher-Priced Contract Lawyer Is Worth the Money
In some situations it might be worth paying more for an experienced contract lawyer. If you are dealing with a very complex contract, you might consider paying a higher hourly rate. Complex contracts might include multi-million dollar transactions that involve multiple parties, law firms and a whole slew of issues. When dealing with contracts like this, you want to hire a lawyer with the expertise and experience to deal with it.
Another important factor for skill charged by a contract lawyer is the industry and type of contract being reviewed . Do you need a contract lawyer that specializes in technology, nonprofit or healthcare? Obviously some contracts are very industry specific. Keep in mind that a contract lawyer will charge a premium for experience and competency in a particular industry.
Finally, include an open mind and flexibility when hiring a contract lawyer. While paying for a high hourly rate at the outset might seem like a bad idea, you might be saving money in the long run if your contract requires a high degree of legal expertise.