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Two Reasons to Use Structured Attorney Fees



Lawyers use legal fees to keep their companies going. These fees keep the lights on in the office and the staff paid. There are many different options for attorneys in how they do their fees. The choice in fee structure usually depends on the type of case the attorney handles. Without these fees, the attorney could not actually support their practice throughout the year.

What are the Options for Attorney Fees?

One of the most common types of attorney fees is the hourly rate. An experienced attorney can estimate how many hours a case will need so the client knows ahead of time what to expect. The fees vary significantly by attorney and area though, so clients may shop around a bit.
Flat fees are another common choice. These are typically used for procedural items, such as setting up a will. Each procedure takes the same amount of time and effort. Therefore, the attorney does not need time to reinvent the wheel to win.
Contingency fees are common in personal injury cases. Instead of an upfront charge, the attorney does not collect a fee until a certain outcome is reached. This possibility works well when the client does not have the money to pay upfront. However, the attorney is taking on the risk.
Retainer fees work well for individuals who plan for certain events. The client pays a fee into a special retainer account. As the attorney works for that client, the fees are deducted out of the account rather than billed to the client. When the attorney-client relationship ends, any remaining fees not covered by the retainer are billed to the client.
The last option is what’s known as a statutory fee. These fees are set by the courts rather than the attorney. The attorney then accepts that fee rather than what they would charge otherwise.
Each possibility for paying an attorney has its merits. However, each is also most useful in specific situations. There are also significant variables on how the client will handle paying the fee for the attorney.


How do Structured Attorney Fees Work?

Like many financial decisions, it is important to understand the benefits of one choice over another. Structuring attorney fees is no different. Structured attorney fees are like setting up a payment plan, which helps both parties. Structured fees can be used in many scenarios, even if originally the fee structure was different.
On the attorney side, the office sets up an arrangement with the client to pay a certain amount every month for a certain amount of time. This mitigates the client’s chances of financial hardship. The office then administers this payment plan, spending hours following up and doing paperwork.

The Benefits of Structured Payments

Structured attorney fees act as attorney payment plans over the long term. In many cases, they offer more benefits to the attorney’s practice than they do to the client, though what they offer the client is impressive.
Structures fees turn into structured payments. Structured payments then come in regularly, even in the case of vacation or a slow month. This means there’s no danger of running out of money. It also allows legal offices to plan out their finances in advance, rather than hoping there are enough clients who can pay every month.
There are also potential tax benefits for an attorney’s office. Ideally, the structured payments mean the individuals are not bumped up to the next tax bracket. There is a very real risk associated with lump sums that taxes will take a significant chunk of the profit. Structured payments are smaller and can be planned for by the bookkeeper.
Structures payments are also a way to protect the money. Since the money is coming in over time, it’s more difficult for it to be included in judgments against a firm. It’s also more protected from creditors and divorce decrees, should those become a concern.

The Best Outcome

Structured attorney fees work well for both the client and the attorney. In many cases, they’re the right option, though there are some potential exceptions like criminal cases. Each situation is unique, and the attorney’s office must decide what level of risk they would like to take in the case.
Structured attorney fees offer attorneys an increased chance of collecting the full amount from the client. In many cases, clients cannot necessarily afford to pay attorney fees upfront without putting themselves in a precarious financial situation. By offering a payment plan option, attorneys can attract more clients.
Structured fees allow an attorney’s office to run without worry month to month. In an ideal world, the clients pay on time without prompting and there are no issues. There’s a certain amount of uncertainty involved in trusting people to pay. It’s worth noting that attorneys do not have to administer their own payment plans.
In the age of software and outsourcing, attorneys do not have to keep their own accounting department. Instead, they can outsource to a service or software to save themselves expenses. Then the outsourced company does the payment chasing instead. That has the potential to save tens of hours of manpower every month.
Outsourcing may not be a possibility for every office. A particularly large office may find it beneficial to keep their own billing department. However, options exist now that haven’t existed in the past, and using them can put a legal office at an advantage.


There are many options for gathering attorney fees. Some favor the clients, while others favor the attorney in the written terms. Everyone has the options, depending on the situation and circumstances. However, there is one option that offers more stability on both sides.
Structured attorney fees smooth out the process of payment for services rendered on both sides of the equation. The client has more opportunities to pay without risking their own wellbeing. The attorney receives a steadier stream of income and potential tax benefits. Structured attorney fees work well for both sides of the relationship in the long term.