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Step 1 Retention of Legal Assistance (hiring an attorney)
Rarely will an attorney take a case for less than $5000 UP FRONT and it is not unusual for this amount to be closer to $10,000. This is referred to as a Retainer Fee. This fee normally merely procures the services of an attorney. In most cases, monthly billing takes place above and beyond the Retainer. There are two general exceptions to the retainer rule: A) Contingency cases - these cases normally involve personal injury. Most personal injury attorneys will take the case on what is known as Contingency meaning that when the case is settled, your attorney will receive a percentage of the settlement (example: your case settles for 40 thousand dollars, costs were $10,000 leaving $30,000, your attorney took the case on a 33% contingency so you receive $20,000). B) Single Pay cases - in Single Pay you write one check and it covers the attorneys fees for the services to be rendered. (Best example: bankruptcy. An attorney might charge a single $5000 fee to manage the entire case from filing through completion.) With these few exceptions, the remain work under the Fee Retention (Retainer) model.
Step 2 The Filing
You have met with your attorney. You have described your situation. Your attorney now breaks the information into legal writing which is filed with the court. Normally this step is a minimum of 8 to 10 hours - and this is for a simple matter. Cost: at $350 per hour, you have just spent $3500 (not including your Retainer) and your case is officially under way. You are the Plaintiff, the party you are suing is the Defendant.
Step 3 The Answer
Once the case has been filed, the other party, the defendant, has the opportunity to answer the original filing (you might call that filing an accusation to get a better idea as to why it would be “answered”). The defendant says in his/her answer, “I’m not at fault, so and so is.” Or “I may be at fault but it’s because of the plaintiff (you) or because of some other person(s).” When a defendant accuses you or other parties in his/her answer it will come in the form of an Answer. This means the Defendant is turning around and suing you or you and other people. When this happens, get ready to start writing some real checks. Costs to this point: $5000. We have seen simple cases deplete between 5 to 7 thousand dollars just getting through The Answer - not including the retainer fee - - and this does not take into account costs associated with Answers to Cross Complaints.
Step 4 Interrogatories
Attorneys prepare a list of questions for all parties - you, the defendant(s), and any other people the defendant may have counter sued - including you. These questions start out simply enough - name, address, social security #, date of birth, driver's license #, employer, job duties (simple right??) Then the questions become more invasive: history of marriage, education, employment. Then they become more complex, requiring you to go over in complete detail the entire case through a series of questions and answers. The Defendant will receive this “request” and so will any other party to the case. Cost: about $1000. This number is low due to the fact that YOU, not your attorney, are performing most of the work.
Step 5 Answer to Interrogatories
Interrogatories are the questions. The Answer to Interrogatories is your answering of those questions. Three things can happen here. 1) Your attorney throws the stack at you and tells you to complete it. 2) Your attorney answers them himself or herself. 3) Your attorney throws the stack at you, tells you to answer to the best of your ability but files Objections in regard to some of the questions. Cost: another $2500 has just disappeared from your bank account AND remember - this is a simple case.
Step 6 Responses to Objections and Discovery
If your attorney or other attorneys have objected to certain questions in the interrogatories, money is now being spent for your attorney to be fighting other attorneys in court. Discovery is the request for any and all documents as they are believed to pertain to the case. These documents are requested by your attorney, the defendant’s attorney and any other attorneys representing any other parties. The same request for documents has been given to your attorney by the other attorneys. At this point, somebody somewhere is going to object to part or all of the request for documents. Your attorney now starts fighting other attorneys in court to show why he/she has a right to these requested documents. Cost: more money is leaving account at an even faster rate.
Step 6.5 Court Ordered Mediation
Right around this time in the case, most courts in California will have ordered an attempt be made to settle the matter through mediation. Cost: this day will cost you approximately 3 to 4 thousand dollars. Even though the court pays the mediator’s fees (usually up to 4 hours), you still bear the cost of your attorney’s fees per hour + his/her travel time + your percentage of the cost of the mediator (if extending beyond the 4 hour time frame) at a rate of about 3 to 4 hundred dollars per hour. NOTE: the hourly rate of a mediator is not always in congruence with his/her capabilities. Many retired judges charge upwards of $500 per hour and many are incapable of reaching adequate resolution.
The mediator is an independent disinterested party whose job it is to cause to take place an agreement between disputing parties which would, in turn, terminate the lawsuit without any further time or expense. The parties present at the mediation are: the Plaintiff (you), the Defendant (the people you are suing), Cross Complainants (other people dragged into the case by either you or the Defendant) and of course, all attorneys. Even in a simple case, there may be 12 people participating in this event. Cost: approximately 3 to 4 thousand dollars PER DAY.
Step 7 Case Preparation and Review
If court ordered mediation has failed - which it usually does, your attorney will now start reviewing information you have supplied and that which has been supplied by other parties. The purpose of this is twofold: 1) to gain further understanding of the case and, 2) to prepare for Depositions. Cost: a simple case - plan on another couple thousand dollars.
Step 8 Depositions
Scheduling now begins for the opportunity for you/your attorney to ask the Defendant(s) questions directly. The defendant’s attorneys also have the right to question you directly. This questioning process is known as the taking of Depositions. Questions can range from something as simple as your name and date of birth to just about anything. Virtually no area of your life is protected from this questioning process. Unless your attorney can show that the answering of a question is completely irrelevant and has ZERO bearing on the case, you will have to answer virtually every question you are asked. The same goes for any other party being deposed. The problem with Depositions is they are extremely time consuming and have a way of wearing you down. Cost: $4000 per day. Each attorney present is making approximately $4000 for each day of questioning. In a simple case, plan on a minimum of 1/2 day per party being Deposed. Three parties, one and a half days or $6,000 per attorney.
Step 9 Review of Deposition Information
Once Depositions have taken place, review of this information now occurs. This may seem unnecessary but at this point, a lot of the case is now available. This means that most of the attorneys are clear on the true merits of the case. Up until this time, all that was available was “he said/she said” type information. By this time most physical evidence has been viewed (contracts, agreements, etc.) and most testimony has been given. In the event someone has misstated facts or lied, this too has become pretty apparent. Cost: a couple thousand.
Step 9.5 Possible Second Attempt To Mediate Dispute
Since at this point most people - especially the attorneys, are familiar with the true merits of the case, one or more parties may suggest a second attempt at mediation (the judge may also order this). The reason for this is due to the fact that substantial monies are spent preparing for and going through an actual trial - expenses which you have not yet experienced. Cost: approximately $4000 per day per party. Even a simple case going to trial can run up a 15,000 to 20,000 dollar tab with NO assurance (no matter how confident you may be) that the case will be decided in your favor. SETTLING AT THIS TIME MAY STILL BE IN YOUR BEST INTEREST.
NOTE: at this time 2 important items need to be addressed. First: If any attorney tells you EVER, that your case is a "slam dunk" and “we can’t lose” get out of his/her office immediately. Any lawyer with more than one year of litigation experience knows that judges and juries do some pretty strange things and in NO CASE IS VICTORY EVER GUARANTEED. Second: In many cases attorneys’ fees are NOT recoverable. This means that even though you may be victorious in court, all the money you’ve spent, up to and including trial, is non-recoverable (you don’t get it back). Make sure you take these two issues into consideration.
Step 10 Preparation For Trial
A year or more has most likely passed. In some cases 2 or 3. Your attorney now needs to prepare for trial. Cost: minimum $3000 and usually A LOT MORE.
Step 11 Trial
If your case is heard before a judge the trial may be quick, however, most plaintiffs demand jury trials. The trial before a judge is missing the courtroom performances normally associated with jury trials. Judges have heard and seen it all and are usually pretty capable of getting to the crux of the matter without a lot of consternation. If you are running a complex case, sometimes a trial before a judge is more reliable due to the fact that the issues at hand may not be understandable to a jury. If a jury can’t understand a case, you’re probably not going to get your money. On the other hand, there will be times were a jury trial is preferable. While more costly, this is a decision you and your attorney will have to make. Cost of trial: about $4000 PER DAY. A simple case: 3 days. More complex: 1 week. Complex: anywhere from 2 to 4 weeks - possibly
more.
Step 12 The Verdict
Did you win or did you lose? If you won, did you receive the money or the result you’d hoped for? Have you taken into account the pain, suffering, time lost from work or life, and the costs associated with this process? Start adding up your hours from the beginning. We had one client who had been involved in a moderately complex case who had spent $50,000 in attorneys’ fees and more than 1000 hours of his own time and the case hadn’t even completed discovery and depositions. This was a $45 per hour worker. Do the math. $50,000 of attorneys’ fees and $45,000 in lost labor. Even if he won his suit, there would be no return of his $45,000 of lost labor and only potential return of his attorneys fees, which if the case went to trial could easily run 90 to 100 thousand dollars. His original losses were approximately $120,000. Would he have been better off settling for 70 or 80 thousand dollars? How about even 30 or 40 thousand? Absolutely.
Step 13 Appeals
If you were too victorious (can you be too victorious? You bet!) the losing party may now make the decision to appeal. More money, more time.
Additionally, this is NOT the complete process. During the entire movement through the various steps of a lawsuit are: attorney client conferences and communications, attorney attorney communications, motions, filings, case settlement conferences, and so forth. Every one of these events requires time billed normally around $350 per hour. These miscellaneous items can easily run into the 10’s of thousands of dollars.
WHAT WILL WINNING COST YOU? YOU NEED TO KNOW THIS.
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