Attorney's Fees/Attorneys' Fees, or Attorney fees are the amounts billed to a client for legal services performed on their behalf. Attorney fees may be hourly, contingent, flat, or hybrid. Nonrefundable fees are prohibited in some states.
Attorney fees may not be unreasonable per Model Rules of Professional Conduct (Model Rule) 1.5(a). The reasonableness standard states that if the client had a free and informed choice before entering into the agreement, and the fee is within the range customarily charged by attorneys in similar representations, it is almost certainly reasonable, see Rest. §34, cmt c. If a fee does not fall within the range customarily charged in the relevant community, then the burden of persuasion is on the attorney to establish that the fee is reasonable. Factors of reasonableness include the nature of the matter, opportunity costs, local custom, stakes for the client, emergencies, repeated work, reputation, and risk factors.
An attorney must not commingle client funds and attorney fees unless it is to pay bank service charges. Generally, client funds and attorney fees must be held separately; an attorney must transfer funds to their office account only as earned. See Model Rule 1.15.
If part of the attorney fees are obtained through a special retainer, the attorney must put the money into a trust account and transfer funds to their personal account only as the fees are earned. A special retainer is a deposit against future services that secures the client’s future ability to pay. Any unearned portion of the retainer must be returned to the client after legal representation has concluded. See Model Rule 1.15(c).
However, if part of the attorney fees are obtained through an engagement or general retainer, the money can be put straight into a personal account because the attorney has earned this by being available. A general retainer is a fee for the attorney’s availability for a specific period of time.
For attorneys in different firms, an attorney cannot be compensated for assuming an entirely passive role. However, attorney fees may be divided on the basis of the amount of work each attorney has put into the case. Attorneys may also share fees if they each assume joint responsibility for the representation as a whole. This joint responsibility comes in the form of agreeing to be fully liable for malpractice, professional discipline, and court sanctions. A division of attorney fees still requires that the client agree in writing to the fee division and that the total fee be reasonable.
[Last updated in December of 2021 by the Wex Definitions Team]