Attorney Fees in South Carolina

 

Flat fees: These are one-time payments that an attorney requires in order to work on your case -- from start to finish.

 

Flats fees represent a lawyer's best estimate as to how much time he or she will have to spend on the case, the difficulty of the case, and the various expenses the law firm will incur in handling the case. 

 

When your retainer agreement states that the lawyer is taking a flat fee, it may also stipulate that fee will be deposited directly into the lawyer's operating account. This is different than the lawyer's trust account, a distinction which is addressed below in the section on hourly fees. When money is deposited into the operating account, it means the the lawyer has earned the money and can thus spend it. 

 

If your retainer agreement asks for a flat fee, it must also state that you are entitled to terminate the relationship with your lawyer, and that you may be entitled to a full or partial refund. The amount of a refund, if any, will depend on how far along your case is, and how much time and effort the lawyer has expended on your behalf. 

 

Contingent fees: "We don't get paid until you do!"

 

Contingent fees are based on the amount of money the attorney is able to recover for you. A typical contingent fee is thirty-three (33%) percent of the amount of money the attorney recovers to compensate you for your damages. That amount usually goes up to forty (40%) percent if the case goes to trial. 

 

That seems like a rather big chunk to take out of the client's recovery. However, contingent fee arrangements usually arise in situations where someone has been injured by someone else's negligence, and the at-fault party refuses to take any responsibility. Therefore, the client starts with zero (0) money to help them pay their medical bills. Contingent fees also help people achieve justice who would not otherwise have the means to hire an attorney. This is because lawyers do not require the client to pay ANY money up front in contingent fee arrangments. And the lawyer takes the risk that, if no money is recovered, he or she will not be paid and will absorb the expenses associated with filing the lawsuit. 

 

Hourly fees: The client makes a deposit (a retainer) with the law firm, and the law firm pays itself from that deposit as it works on the case.

 

Your lawyer might tell you something like, "I will need to see at least $______ to begin working on your case." A lot of clients are confused and think that the lawyer is asking for a flat fee. In other words, the client thinks the lawyer is going to deposit that money directly into his operating account and spend it right away. This is why it is important to know whether your lawyer is working for a flat fee or an hourly rate. In the latter situation, the retainer that you provide your lawyer is deposited into the law firm trust account, completely separate from money the law firm uses to pay its bills. These accounts are known as IOLTA accounts, which stands for Interest On Lawyers Trust Accounts. Any interest accumulated on money in these trust accounts is deposited with the South Carolina Bar, which then uses the money to fund legal services for low-income familes in the state.

 

Lawyers must hold your retainer fee in trust until they work on your case, at which point they can pay themselves at the hourly rate you both agreed on in your retainer agreement. For example, if a lawyer works on your case for five (5) hours one week, he can pay himself 5 times the hourly rate, but whatever is left of your retainer fee must remain in the trust account until the lawyer does more work. If the lawyer works enough to earn the entire retainer fee, the retainer agreement usually stipulates that the lawyer may ask the client to make another deposit (in pre-established increments) before continuing work on the case.

 

Hourly fees are best for situations where there are many variables that may alter the amount of time and effort needed to conclude the case. Flat fees are only appropriate where it is fairly easy for the lawyer to predict how much money the case will require.