The Difference Between Fees and Costs

Filed under All Articles (Our Blog), Condo Law Articles, Law 101 Articles

I find that clients often get confused about the difference between the terms “fees” and “costs”, so I thought it might be a good idea to give a quick explanation. Hopefully this article can clear up some common misconceptions.

FEES

A fee is the money that is paid to an attorney for her hourly work. If the attorney charges a “fixed fee”, the fee is the lump sum amount of money that the attorney is accepting for all the hours of work she puts in via her labor.  If the attorney charges a “contingency fee” it is the amount of money she will get for her labor hours if she is successful in settling the case or winning at trial.

COSTS

Fees are not the same as costs.  Costs include money paid out for a case that do not represent money being paid to the attorney for her hours of labor. It is money paid out for anything other than attorney labor. For example, costs can include such things as court filing fees, postage for mailing various documents to or from the attorney and other people involved in the case, long distance phone call charges, court reporter fees (from depositions or hearings), medical or other expert fees, copy charges for medical records (charged for by the doctor’s office or records custodian and paid by the attorney on the client’s behalf), translator fees if a party speaking a foreign language is involved, hotel room charges for out of town depositions or other case issues, and many other items that may incur costs during the handling of a case.   

PAYMENT OF COSTS

Many times the costs are paid by the attorney on behalf of the client, from the attorney’s own operating account, and then reimbursed by the client. In contingency fee cases, if the attorney doesn’t win the case, often they never get their costs reimbursed.  This represents the risk attorneys take in offering contingency fee structures to their clients.  Remember, when your attorney talks to you about fees, she is not also talking to you about costs.  If you’ve agreed to a fixed fee contract with your attorney, it usually will not include costs like the ones outline in this article.  Your attorney should have you sign a contract before beginning work for you, and the details of the fees and costs included in the legal representation should be spelled out in that contract.  Don’t be shy about asking your attorney about fees and costs and make sure you understand the difference. 

Post a Comment

You must be logged in to post a comment.