How Lawyers Bill

Whether you want to work as a lawyer, work for lawyers, or are considering hiring a lawyer, it is good to understand the facts behind how lawyers bill.

(Photo Credit: Stormydog/Flickr)

If you work in a law firm, then you are familiar with the concept of "billable hours." This essentially means that a lawyer may keep her chair nice and warm from 8 a.m. to 6 p.m., but she only makes money when she is doing something for which she can charge her clients. The receptionist gets paid whether the phone rings or not, the secretary gets paid whether there is a lot of work or it's a quiet day, but lawyers don't make money on quiet days.

Rocketmatter reports that while 67 percent of lawyers in the United States of America bill for 1800 hours or less per year, 18 percent bill more than 2,000 hours per year. Working 50 out of 52 weeks per year for 40 hours every week equals 2,000 hours. Every minute of the workday is not billable, so these lawyers are supposedly working much longer days. A full 58 percent of lawyers claim to work 50 hours or more per week, some of them more 60 hours per week.

Those billable hours can be expensive. 65 percent of lawyers bill more than $200 per hour, and more than half of those bill more than $250 per hour. Of course, that is not all profit. Those who bill for their time are also responsible for overhead costs including malpractice insurance and employee salaries and wages.

There are more ways for lawyers to bill than by the hour, however. Contingency fees are a percentage of the winnings. This works well for the client, because the lawyer only bills if they win. Most lawyers won't take contingency cases unless there is a very good chance of winning.

Sometimes lawyers bill a flat fee to perform work for a client; this helps the client budget. Sometimes lawyers require payment up front, called a "retainer," from which they draw their hourly pay. Only about 4 percent claim that the retainer is not refundable; most lawyers return unused retainer funds to client when the case is over.

Tell Us What You Think

Have you ever billed for your time? Tell us about it below or join the conversation on Twitter.

More from PayScale

10 Worst Things to Spend Your Money On

Federal Labor Law Picks up Where the First Amendment Leaves Off

Stop Procrastinating! (Right After You Read This Post)

Comment




  1. Please prove to us that you're not a robot: