How do bankruptcy lawyers get paid
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Although every lawyer has his or her own unique way of doing things, most law offices share a surprising number of similar characteristics in terms of how they do business. Understanding some of them will help you to get more effective legal representation.
Law offices range in size from sole practitioners to firms with literally hundreds or even thousands of lawyers. While all of them charge for their time in one form or another, there are some practical distinctions to keep in mind that can roughly be broken down by the following categories:Sole Practitioners . Once a lawyer has passed the bar exam, it does not take much more to start his or her own practice other than renting office space and hanging up a shingle. Thus, it is not surprising that law offices of sole practitioners are probably the biggest single category of practicing lawyers. Sole practitioners can be excellent lawyers and so you may want to consider retaining one if it makes sense, given the nature of your legal problem. Although no two lawyers are the same, potential benefits of hiring a sole practitioner include:
- A more direct one-on-one working relationship with your lawyer. Your case is not going to get lost in the shuffle because it is not going to be handed off to another attorney.
- Lower fees and costs. Although not always the case, sole practitioners generally have lower overhead a larger law firm. Thus, it is not unusual for a sole practitioner to charge less than a big firm might charge for doing the same type of routine work.
- Taking smaller cases. As another potential benefit of being able to charge less, a sole practitioner may be more inclined to take the smaller cases that are not cost effective for a big firm.
- A more informal working relationship. You are likely to get to know everyone in your lawyer's office if he or she is a sole practitioner. This can lead to a better one-on-one working relationship, which may make you feel more comfortable.
- Conflicts of interest are easier to handle. Generally speaking, a law firm cannot handle a legal matter when it gives rise to a conflict of interest between clients of the firm that they are not wiling to waive. Depending on the size of your community, the larger the law firm, the more likely there may be conflicts of interest. Things tend to be more cut and dry with sole proprietors and the smaller law firms.
- More expertise in a given specialty. In a firm environment, lawyers are better able to develop areas of expertise since they do not have to be all things to all people. Some small law offices are called "boutique" firms because they tend to specialize in a given area.
- A small law firm can handle a broader range of legal matters. Some cases are simply too complex for a sole practitioner to handle.
- Better coverage. No lawyer can be available all the time, so a benefit of a small law firm is having other lawyers to help out on a matter.
- Pooling of knowledge and experience. It is always helpful on a complicated legal matter to be able to talk to other lawyers to pick their brains on legal strategies. A small law firm is a great environment in which to do this.
- Being the best of both worlds. A mid-size firm may have many of characteristics of a small law office yet at the same time have the legal resources to do battle with the big firms. The balancing process can be a difficult one, but many mid-size firms are successful in preserving it.
- Full-service capabilities. A mid-size firm may truly be able to provide effective legal representation in every major area of practice. Thus, it may be able address all of your legal needs.
- Reputation. The larger law firms did not get big overnight. Such firms have usually been together for a number of years, and the fact that they have stayed together is evidence of a good reputation. Hiring a well-respected law firm can be a big benefit to a client.
- Contacts. The contacts that a law firm has may be just as important as reputation. Although it is not always the case, the larger the law firm, the better the contacts they may have, not only in bar association matters, but also the community as a whole.
- Lawyers with high levels of expertise who have been educated at the most prestigious law schools.
- Resources to handle legal matters for public companies, governments, and other large organizations.
- Clout. You are a formidable opponent if you have a large law firm on your side. It can convey a message to an opposing party that you mean business.
- Multiple locations. Almost all large law firms have offices in strategic metropolitan areas. More and more, these firms have offices worldwide. As businesses go global, this gives the large law firms a major competitive edge when it comes to representing international companies.
Identifying the People Who Work at a Law OfficeA law office typically has many employees in addition to the lawyers. Knowing who these people are and what they do may help you to be a more informed client and thereby facilitate the effectiveness of your lawyer's representation. Typically, the hierarchy can include any of the following people:
- Partners. People commonly refer to the owners of a law firm as being the partners. It is very prestigious for a lawyer to become a partner of his or her law firm. Partners are usually the most experienced lawyers in a firm and, consequently, they charge the highest fees.
Lawyers who are employed by a firm but who are not owners are usually called associates. Generally, associates can be very good lawyers but they typically have less experience than the partners of the firm. Although it varies from firm to firm, associates may have to work for perhaps three to ten years before they are considered for partnership. Given their experience, associates tend to bill at lower rates than partners do.
- Contract Lawyers. A firm will sometimes hire outside lawyers as independent contractors to do part-time work. The firm will usually pay a contract lawyer on an hourly basis and then bill out his or her time at a higher rate in order to cover overhead costs and hopefully make a profit off of the lawyer's work.
- "Of Counsel" Lawyers. Many firms will also develop an affiliation with one or more lawyers under an "of counsel" arrangement. Such an arrangement is oftentimes hard to define, but it usually contemplates something more than a part-time contracting relationship. For example, a lawyer who is quasi-retired may continue a relationship with his or her firm on an "of counsel" basis rather than being a partner.
- Law Clerks. It has been a tradition for as long as there have been lawyers to have law students clerk for firms while they are going to law school. They will do legal research and otherwise assist lawyers in preparing cases and working on other law-related matters. Hiring a law clerk is one way for a firm to recruit new lawyers.
- Paralegals. A paralegal is someone who has legal training but who is not a lawyer. Paralegals can serve a very important role in a law firm by providing critical support to lawyers when they are working on cases. In many instances, paralegals can have a practical working knowledge of the law that can make them more valuable to a law firm than a new associate. They are able to work under the supervision of a lawyer on the detail work that has to be done on every case but that cannot justify the high billing rates of a lawyer. Paralegals typically bill at rates that are probably half of what a lawyer charges.
- Legal Assistants. This is really a catchall term that is sometimes used by law firms to describe anyone in a law office who assists in working on legal matters. It may include paralegals, legal secretaries, and other support staff.
- Legal Secretaries. Every lawyer is burdened with an endless barrage of administrative details and procedural requirements that are a part of practicing law. These duties and requirements can be a huge distraction for a lawyer who does not have a competent legal secretary to organize and assist with the day-to-day affairs of his or her practice. Part of the process of hiring a lawyer may even include an assessment of whether he or she has a good legal secretary.
- Receptionists. A firm of any size will have a legal receptionist. Commentators will tell you that the receptionist is the most important person in the office since he or she is the firm's initial contact with the outside world.
- Investigators. Depending on the type of law they practice, some law firms will hire their own investigators who are charged with going out and investigating background facts on a case.
- Administrative Personnel. Larger law firms will have their own administrative personnel to run the internal operations of the firm. While administrative staff generally do not charge for their services, they do constitute an overhead cost that is ultimately reflected in billing rates. Administrative staff may include accountants, bookkeepers, librarians, billing and accounts receivable personnel, and human resources.
- Marketing Directors. Yes, larger firms will even hire their own marketing directors. They are responsible for creating a positive image for their law firms with the goal being to attract new clients and to retain existing ones.
- Other Personnel. Many law firms will have runners, part-time clerical help, and other staff members to perform certain functions of the law office. The larger the law office, the more likely you will find such personnel on staff.
Tips for Keeping Down the Legal BillsUpon hiring a lawyer, you may have contact with some or all of the personnel listed above. Thus, it is important for you to know who these people are and what role they play since it can affect how you are charged. As some more helpful hints, you may want to keep in mind the following:
- A partner is going to bill at higher rates for time spent on your case. At the same time, though, having a partner work on your matter may actually be cheaper in the long run if it requires a high level of expertise since it may take the partner less time to resolve a legal problem than it would an associate who has a lot less experience.
- Lawyers typically bill for telephone calls. Thus, make sure you have a good reason for calling your lawyer before you do so. It is sometimes a good idea to try talking to the lawyer's secretary or even a paralegal to see if you can resolve the issue at hand rather than talking directly to the lawyer.
- Lawyers bill for travel time and costs. Thus, if you are given the choice, plan meetings at your lawyer's office rather than insisting that he or she come to your office.
- You want to insist that your lawyer provide you with an itemized bill that gives detailed information on how you are being charged. While every law firm does things differently, many of them charge not only for lawyer time but also for time spent by paralegals, legal secretaries, and other support staff. You can use the information on an itemized bill to decide how to communicate most effectively with your lawyer's law firm without running up the legal bills.
- The more time a lawyer has to spend on preparing a case, the more you are going to be charged. Thus, you may want to work on developing an effective working relationship with support personnel with the goal of using your own time to help them work up the case and thereby keep legal bills at a minimum. (This does not mean trying to do all the work yourself and then simply having the lawyer sign off on it. You have to defer to the discretion of your lawyer in this regard since it is sometimes easier for a lawyer to develop his or her own work product from scratch rather than trying to revise something that the client has already tried to do on his or her own accord.)