Attorney Fees

To preface this page let me first identify the basic types of fee arrangements:

1) Hourly Fee: The fees are computed by multiplying the number of hours an attorney expends in a legal matter by an hourly rate to determine the final fee.

2) Contingent Fees: The fees are computed by multiplying the Contingent Fee percentage agreed upon by the amount recovered upon behalf of the client.

3) Suit Fee: A suit fee is a one time lump sum payment the attorney charges for the preparation and filing of the documents necessary to commence suit. This fee is usually coupled with a Contingency Fee agreement regarding potential recovery upon the claim and is used when the client desires to pursue a claim which the Attorney feels may have a minimal likelihood of recovery but which may result in a default judgment being obtained. It may also be used when the client is willing to pay the initial costs of suit but is unable to incur or pay the full costs of a contested matter. In such cases, the Contingency percentage may be slightly lower than a regular Contingency Agreement.

4) CLLA Fee: This is a contingency fee based upon a sliding scale and is usually applied to pre-litigation recovery efforts (demand letters or telephone calls etc) by the attorney. The CLLA scale is 20% on the first $300 recovered, 18% on the next $1,700.00 recovered and 13% on any amount recovered in excess of $2,000.00.

FAQ About Attorney Fees:

1. What is your current hourly rate?

My current hourly rate is $240.00 per hour. Time is kept and billed in increments of a tenth of an hour. Monthly statements are issued and payment must be made by the end of the month in which billed. My standard fee agreements provides for interest at 18% per annum on any past due and unpaid amounts.

2. When is a contingent fee available?

A Contingent fee may be utilized when the client has an inability to fully pay the anticipated legal fees associated with the litigation and the attorney believes the case is meritorious and that a reasonable chance exists of eventual collection upon the judgment likely to be obtained.

A Contingent fee arrangement may also be appropriate where the client presents a volume of separate cases to the attorney for legal action. In this situation the risk of non-recovery on any single case may be offset by the opportunity of a larger or full recovery on other cases and thus present an economical solution for both the client and the attorney.

A contingent fee will not be applicable in cases where the potential judgment debtor poses a high risk of filing bankruptcy, is likely to move and leave the State or has few known assets available for recovery.

3. What is the contingency percentage? How is it determined?

The contingency percentage is proposed by the attorney after considering the initial size of the claim presented, the potential complexity of the case, the potential time involved in preparing for and going to trial, the likelihood and size of any potential recovery and how long such recovery actions may take.

In a normal commercial case this percentage can range between 15% to 33 1/3% and is subject to negotiation and agreement between the attorney and client before the case is initiated.

4. What is a Retainer?

A Retainer is the amount of advance fees the attorney requests. Usually a Retainer is utilized when dealing with a new client and the attorney has no prior financial dealings upon which to ensure timely payment will be made. When paid, it is deposited to the Attorney's Trust Account and used to pay the attorney fees, as billed by regular statements, until exhausted. Once exhausted, regular monthly statements continue to document and charge the fee due the attorney.

5. Is a Contingent fee more economical than an Hourly fee?

The answer to this question depends on evaluating the same facts identified in FAQ #3. In most cases, it is more economical to pay an Hourly fee as the Contingent Fee rate has a risk factor of non-collection for the attorney built into it. Also, your case may be resolved or settled quickly with a nominal investment of attorney time. Under an Hourly fee agreement this would result in a smaller attorney fee paid; whereas, under a Contingent fee agreement the attorney fee paid is the same regardless of the time the attorney has invested.

6. What happens if I can't pay my attorney fees?

In the event you are unable to pay your attorney in compliance with the terms of your written fee agreement, the attorney has the option of terminating his representation of you in the case. To do so, the attorney must comply with the local rules regarding withdrawal of counsel and obtain the Court's approval of such withdrawal. As part of this process, the attorney may request or place a lien upon any future potential recovery you may obtain in the case.

In addition to withdrawal from representation and placing a lien upon any future recovery in the case, the attorney is free to pursue suit against you for default upon the terms of your Fee Agreement.

7. Is a Contingent fee agreement available for post judgment collection activity?

If you obtained a judgment on your own (pro se) and need assistance in collecting such judgment, a contingency fee would be negotiable based upon the size of the judgment and the attorneys evaluation of the likelihood and timing of any potential recovery. While the Contingency percentage is usually lower in these type of cases (CLLA rates or a fixed 10-15% rate), as the attorney does not have to invest a considerable amount of time to obtain the judgment, the risk factor of no recovery must still be considered by the attorney. In most cases it is far more economical to pay an hourly fee for such legal representation, unless the judgment is large and the likelihood of recovery is remote.

8. Can I recover the attorney fees paid under a Contingency Fee Agreement?

In Colorado, attorney fees are recoverable in two circumstances: 1) if authorized by statute; or, 2) if a written agreement exists whereby the party sought to be charged for such fees has previously agreed to pay such attorney fees if found to be the losing party in the litigation.

The attorney fees sought to be included in the judgment entered by the Court will be reviewed by the Court to determine their reasonableness. If a contingency fee is involved, the Court will likely review the attorney fees requested for reasonableness as to total amount, as calculated under the Contingency Fee Agreement, and compare them to the amount of fees which could have been expected to be incurred under an hourly billing arrangement.

If the judgment obtained was based upon a default by the Defendant(s), and the requested Contingent fee is quite large, it is likely the Court would limit the amount of attorney fees recoverable against the Judgment Debtor. In such case, you would still be obligated to pay the attorney the full amount of the Contingency fee agreed to in the Fee Agreement. This circumstance occurs quite often in County Court default judgments.