What’s the Difference Between Attorney Fees and Out-of-Pocket Expenses?

May 29, 2017

One of the biggest fears when hiring an attorney is how much it will cost. While some attorneys do require hourly payment, our attorneys at Hensley Legal Group work on a contingency fee. This means, essentially, that if we don’t win for you, we don’t get paid.

But in addition to attorney fees, there are out-of-pocket expenses that may accumulate throughout the legal process. Are these covered by the contingency fee? If not, who pays them, and when?

Attorney Fees

Attorney fees are fairly straightforward: they are the money you pay to be represented by a lawyer. Just like you have to pay a plumber for his time and services when you hire him, you have to pay your attorney for their time and the expertise they bring to your case.

However, unlike with a plumber, you’re not paying your attorney hourly. Instead, your attorney is working on contingency, promising that you won’t have to pay for your attorney’s time and skill if he or she doesn’t win you a settlement or award.

If your attorney does win your case, the attorney fees will be paid out of your settlement before you receive your settlement check. Typically, an attorney’s fee is 33.3% of your settlement or award. If your attorney has to take your case all the way to trial, that fee becomes 40%.

Out-of-Pocket Expenses

Attorney fees cover the cost of hiring a skilled, experienced attorney to represent you. But what about the other expenses that may accumulate through the legal process? These are case costs, also known as out-of-pocket expenses. Typically, your attorney pays for these expenses as they come up with the promise that they can recover these costs after the case is over.

Out-of-pocket expenses differ from attorney fees because they have to be paid regardless of whether or not you receive a settlement or award. The attorney simply covers these costs up-front to make the process of payment easier. If your attorney wins your case, they can simply deduct the out-of-pocket expenses from your settlement at the same time they deduct the attorney fee. At Hensley Legal Group, if your attorney doesn’t win your case, you don’t have to pay a single penny for attorney fees or out-of-pocket expenses. Our attorneys will not ask to be reimbursed for your out-of-pocket expenses if they don’t win your case.

Types of Out-of-Pocket Expenses

When you receive the disbursement of your settlement or award, you’ll be able to see how much money went toward each type of expense. For out-of-pocket expenses, you won’t see your money going toward things like your attorney’s morning coffee or lunch break. Instead, you’ll see expenses like court filing fees or the hourly payment of an expert who gave his or her testimony. The out-of-pocket expenses cover the costs associated with the legal process (except, of course, your attorney fees).

Let’s go back to the plumber analogy. You expect to pay him for his time and skill, but what if he tells you he needs to order a brand new part to properly fix your sink? You would have to cover that expense as well, but he’ll probably pay the company that sells the necessary part upfront and then include the extra expense on your bill when he’s finished fixing your sink.

The same is true for out-of-pocket expenses. Your attorney may need to purchase the time, skills, or services of another business or expert in their mission to win your case. An attorney will typically cover these costs initially with the promise of being compensated afterward.

Help from an Indiana Personal Injury Attorney

If you’re considering hiring an attorney but are worried about the cost, call Hensley Legal Group or contact us online today for a free consultation. We can discuss the details of your case and explain what costs and fees to expect throughout the legal process.