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Michigan Lawyer Fees - Client-Lawyer Fee Agreements and Collection

By Edited Jun 5, 2016 0 0

What is my case worth?

Michigan lawyer fees collection is done by collection lawyers through collection attorneys and their staff. The determination of lawyer fees begins with an agreement between a lawyer and a client.

Michigan lawyer fee agreement between a lawyer and a client is usually express or implied. This is with the exception of contingent fees in cases of personal injury, which the Michigan statute governs by court rule. In small towns and rural areas, lawyers charge less while lawyers in specialized areas charge more.

In Michigan, the collection lawyers, collection attorneys and staff provide commercial and retail creditors with extensive ethical and professional collection of bad debts in Michigan. There are four major legal payment arrangements: Contingent fees Flat fees, hourly rates and Retainers

The most commonly used type of Michigan lawyer fees payment is hourly rates. The lawyer is usually paid on hourly rate agreed based on the number of hours worked on a client's matter until its resolution. Hourly payments depend on lawyer’s location of practice, experience and operating expenses.

Retainer Fee

Retainer fee is usually a prior payment on the hourly rate given for specific cases. The fee is put in a trust account by the lawyer from where he deducts as expenses on services accrue. As legal presentations continue, the client reviews the billing statement and the deductions from the retainer. Retainer fee is non-refundable and if the client decides to drop a case that is ongoing, he/she loses the remainder of the retainer amount.

Flat fees are charged in legal cases that are well defined and simple. Flat fee case examples are wills, simple bankruptcy filings and uncontested divorces. The flat fee should be specific on what expenses it covers and what it does not cover.

Contingent fees are charged as a percentage of the total amount spent on the case. They are collected based on premises without prior collection and are calculated as a percentage of the amount collected. Examples of contingent fee arrangements are medical malpractice, accident litigation, debt collection and personal injury cases.

Michigan lawyers Fee Arbitration

Fee Arbitration

Arbitration is resolving legal fee disputes early when the cost is low. This benefits the client and the lawyer as well. It increases client satisfaction and confidence with the legal service providers and diminishes incidences of professional liability suits against lawyers. There are three major types of fee arbitration: Voluntary, mandatory bidding and non-bidding.

Michigan voluntary fee arbitration is the informal process of resolving Michigan lawyer fee disputes between clients and their lawyers. This involves a written agreement between the client and the lawyer to take their dispute to an arbitrator. An arbitrator is usually a neutral third party in the hearing of all the evidence presented by the client and their lawyer. The arbitrator refers to all relevant documents and makes a written decision concerning the amount of fee to be paid.

Michigan mandatory fee arbitration is either the lawyer or client is required to participate in arbitration before the other files their case over legal fees.

Michigan binding arbitration is where both the client and the lawyer are bound by the arbitrator‘s decision in the determination of what the fee should be. In this case, none of the parties can take the case further into court. Non-binding arbitration is one that allows the party dissatisfied with the arbitrator’s decision to take the matter further into court.

The Process of Arbitration

Arbitration

Arbitration hearings are usually informal. Evidence is presented in a concise and respectful manner, the major focus being why one believes the lawyer's fees are abnormally high. Usually, no private communications are allowed with the arbitrator. Instead, they should be made in writing and sent to him. If there is a witness who does not appear for hearing, the arbitrator or fee dispute administrator issues a subpoena. A subpoena is a written order that gives command to a person to appear at a legal hearing.

Evidence of Arbitration

There are factors an arbitrator considers to decide what the fee should be. These are; lawyer’s skill and skill required in the client’s case, actual time spent at the case, outcome of the case, negotiations made into the legal fee agreement and the amount already received by the lawyer. The relevant documents the arbitrator refers to are statements of billing the written agreement between the lawyer and client on fees payment, documents sent by the lawyer to the client and copies of payments made to the lawyer. If agreements were made by oral means, the arbitrator considers a reasonable fee based on the rates offered to similar lawyers with similar skills in the area.

The Arbitration Decision/Award in Settling Of Legal Disputes in Michigan

This is a written decision by the arbitrator, a reasonable time after the hearing, done under advertisement. It is in form of a letter that outlines the decision, deadlines to be met (if any) and other information of the parties’ options following arbitration. In the case where arbitration is non-bidding, options are for the parties to use the arbitrator’s decision to take matter into court.

According to Michigan statute, the amount of compensation for legal fees is based on implied or express agreement between the parties involved. However, Contingent fees in cases of personal injury are issued by court rule. The statute provides that the basic rates can be defined on consideration of three criteria.

Identification of factors that can be taken into account to fix the fee, an estimated amount or fixed charge and an hourly charge are criteria that can be used. The criteria used can be revised by the client from time to time.

Deductibility of Legal Expenses under General Principles

General legal principles provide that deductibility of legal expenses be based on assessable income or losses, incurred in earning assessable income or in business aimed at producing assessable income. Losses or an outgoing is not deductible to the extent that it is of capital, private or domestic nature. Only a general deduction loss or outgoing can be deducted. Expenditure should have a connection between income and its earning to qualify as an outgoing incurred. It should be incidental and relevant to the income.

Summary

Lady Justice

Client-Lawyer Fee Agreements involved in Michigan lawyer fees is a process that mainly involves the two parties. The price that the client pays results from the agreement between the two parties. They may agree on an hourly bases, the outcome of the case or they entire job in a fixed price. Michigan lawyer’s fee is usually agreed on hourly bases, case outcome or as a fixed amount on the entire case.

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