Is My Lawyer Allowed to Charge Interest on My Case Expenses?

Is My Lawyer Allowed to Charge Interest on My Case Expenses? When you hire a lawyer to represent you in a legal matter, you expect them to fight for your rights and help you achieve the best possible outcome. However, the costs associated with a legal case can quickly add up, leaving you with a hefty bill to pay. One question that may cross your mind is whether your lawyer can charge interest on your case expenses. In this blog post, we'll explore this topic and provide the information you need to make informed decisions about your legal representation.

What Can Lawyers Charge For?

Lawyers can charge for legal services and costs associated with their representation of you in your case. Discussing fees and expenses with your lawyer upfront is important so you clearly understand what they expect you to pay and when. In some cases, they can also charge interest on unpaid expenses.

How Do Lawyers Charge Fees?

Lawyers typically charge fees in one of three ways:

• Hourly rates: The lawyer charges a set hourly rate for time spent working on your case. This can include time spent in court, researching legal issues, and communicating with you and other parties involved in the case.
• Flat fees: The lawyer charges a set fee for a specific service, such as drafting a simple will or handling an uncontested divorce.
• Contingency fees: The lawyer agrees to take a percentage of any settlement or award you receive as payment for their services. Under a contingency fee arrangement, your lawyer doesn't get paid if you don't win your case or receive a settlement.

What Are the Costs and Expenses of a Legal Case?

In addition to the fees charged by your lawyer, there are also costs and expenses associated with a legal case. The legal expenses of a court case can vary widely. Some of the factors can depend on the complexity of the case, the length of time it takes to resolve, and the services rendered. Other factors and costs include:

• Filing fees charged by the court
• Service of process fees (fees for delivering legal documents to the other party)
• Expert witness fees, which include the expert’s examination of the individual or the documentation associated with the case, the preparation of their opinion report, and potential court appearances and associated expenses)
• Travel expenses (if your lawyer needs to travel for depositions or court appearances)
• Copying and postage costs
• Investigator fees
• Trial exhibits
• Jury fees (if your case goes to trial)

Your lawyer should provide you with an estimate of these expenses upfront and keep you informed of any additional costs that arise during your case. It's important to factor these expenses into your overall budget when deciding whether to pursue legal action.

Can an Attorney Charge Interest on an Unpaid Bill?

In New York, under N.Y. State Bar Op. 1997-1 (1997), lawyers are allowed to charge interest on unpaid disbursements. In that case, a lawyer borrowed money from a bank to pay their client’s litigation fees. Another lawyer queried the New York State Bar Association’s Committee on Professional Ethics about charging interest on expenses. This lawyer works on a contingency fee basis. They asked if a lawyer can charge a flat interest charge on lawyer-funded disbursements, must the client be offered an opportunity to pay each expense as it comes up, and how can the interest rate be determined. The determination was that lawyers are allowed to charge interest on disbursements paid on the client’s behalf if:

• The lawyer advised the client that interest would be charged on disbursements that aren’t paid within a specific period of time;
• The client consents to the arrangement before it begins;
• The client is promptly billed for disbursements;
• The period of time between billing and the levy of the interest charge is reasonable;
• The disbursement was appropriate; and
• The rate of interest is reasonable.

The State Bar Committee refused to opine on the rate of interest an attorney should charge other than saying it should be “reasonable.” If your lawyer does charge interest on unpaid bills, they must disclose this to you in writing before you agree to hire them. The interest rate and other agreement terms should be spelled out in your retainer agreement or another written document. Even if your lawyer is allowed to charge interest on unpaid bills, they may choose not to do so. Many lawyers understand that their clients are going through difficult times and help you manage your legal expenses. That means they may be willing to work out a payment plan or other arrangement.

What Happens If You Can't Pay Lawyer Fees?

If you find yourself unable to pay your lawyer's fees, the first step is to communicate with your lawyer about your situation. Many lawyers are willing to work with clients who are experiencing financial difficulties. The general rule is that they can offer a payment plan to manage your legal expenses. If you're truly unable to pay your lawyer's fees, you may need to consider other options, such as:

• Seeking help from a legal aid organization that provides free or low-cost legal services to those in need
• Asking friends or family members for financial assistance
• Applying for a personal loan or using a credit card to cover your legal expenses
• Negotiating with your lawyer to reduce their fees or accept a smaller payment

It's important to address any issues with paying your attorney's fees as soon as possible. If you ignore the problem, your lawyer may withdraw from your case, leaving you without legal representation. However, this is highly unlikely as the Code of Professional Responsibility and legal ethics always guarantee that you will be represented in court.

Getting Help with Your Legal Case

If you're facing a legal issue and are concerned about the costs of hiring a lawyer, it's important to remember that you have options. At Hach & Rose, LLP, our New York City personal injury lawyers understand the financial strain that a legal case can put on our clients. Our law firm works hard to provide compassionate, affordable legal representation to those who need help. If you're worried about paying your legal fees or have questions about the costs of your civil action, contact us for a free consultation. Our experienced attorneys can review your case, discuss your options, and help you find a solution that fits your budget. To learn more, get legal advice, or schedule a consultation, call us at 212-779-0057.

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