Find the best financing to cover the costs of your legal case.
To avoid going broke, you might want to consider getting help paying your fees. Read on to learn about your options.
What are my borrowing options to pay for legal fees?
The most straight-forward way to pay legal fees is out of pocket. But that’s not always a possibility, especially if you weren’t expecting to need a lawyer. In those situations, you might want to consider one of the following options.
Best for: A one-time legal expense
You can generally use a personal loan for any legitimate expense, including legal fees. They’re best for when you know ahead of time how much you need to spend — like paying for a consultation or a cut-and-dry case.
You can typically borrow between $2,000 and $100,000 at once and pay it back in monthly installments over a fixed period of time, usually between one and 10 years.
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Personal line of credit
Best for: A drawn-out legal proceeding
When you’re not sure how long you’re going to need to pay legal fees, you might want to look into personal lines of credit. Instead of borrowing a set amount of funds once, you’re have access to a certain amount of funds at any time. You only have to pay interest or fees on the amount you draw and can typically renew your credit line as many times as you want.
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Best for: Someone suing for damages
Hoping to win a settlement? You might want to ask your lawyer if they’d be willing to work your case for a contingency fee. Instead of paying your fees upfront and out of pocket, a contingency fee allows you to pay your lawyer with a percentage of the damages you’re paid.
Contingency fees are generally not available for divorce cases, small settlements, criminal or child custody cases.
Awards of attorneys’ fees
Best for: Someone suing for damages
Awards of attorneys’ fees work almost exactly like contingency fees. The difference is that instead of your lawyer taking a percentage of your damages, the court orders the defendant to pay your legal fees. This is generally only an option if your lawyer thinks you have a strong legal case.
Legal payment plans
Best for: Immigration, defendants in criminal or civil cases
Ask your lawyer if they’d be willing to draw up a legal payment plan to help you cover the cost of your case. Many have standard legal plans — and not all charge interest or extra fees. Some are also willing to accept a partial upfront payment plus smaller installments over time.
This could potentially be an easier, less expensive option than third-party financing like a personal loan if you have poor or no credit. That’s because you might not need to prove your creditworthiness to qualify, and you’ll have more room to negotiate your terms. The downside is you could end up losing your legal representation if you fall behind on payments.
Best for: Cases that the public might stand behind
Trying to keep costs down? Reach out to your social network to raise money for your legal fees. You’ll likely pay the platform a percentage of the funds you earn, so factor in platform costs when you’re setting your goal.
Platforms like Funded Justice specialize in raising money specifically for legal cases. However, some people are more comfortable going with name brands like Kickstarter or GoFundMe.
Best for: Any legal fee you can pay off quickly
Sometimes the easiest way to pay a one-time legal fee like a consultation is to put it on your credit card. Most law firms accept them, and it’s an easy way to meet spending minimums and earn miles or points. You’ll want to pay it off quickly to avoid accumulating interest, since credit card rates are usually higher than those of personal loans. On top of that, having a high balance can lower your credit score.
Pro bono lawyer
Best for: High-profile cases, low-income clients
Lawyers sometimes reduce their fees or waive them entirely on cases that they think could generate a lot of press or for low-income clients. Some law firms even require lawyers to take on a certain number of pro bono cases each year.
To find a pro bono lawyer near you, check out the American Bar Association’s list of pro bono programs in your state.
Friends and family
Best for: Smaller legal fees
You can also reach out to your relatives and close friends for help covering your legal fees. You might not have to pay interest and if you do, it’ll probably be a low rate. Just be aware that you could damage your personal relationships if you’re unable to pay it back.
Am I eligible for a personal loan?
If you’ve run into some trouble with paying off debt in the past, you could have trouble qualifying for credit from a lender. Generally, you’ll need to meet the following requirements to be eligible for a competitive personal loan:
- Have good or excellent credit
- Be employed
- Be a US citizen or permanent resident
- Have a debt-to-income ratio below 43%
- Have a checking account
- Be the legal age to take out a loan in your state
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How much do legal fees cost?
The total cost of your legal fees varies wildly, depending on on your specific situation and deeds. These are some common fees you might run into in addition to the lawyer’s hourly rate.
Either a fixed or hourly fee for your first meeting with your lawyer, typically paid upfront. Lawyers generally require a consultation before you decide to use their services. You typically don’t need to pay this if you have a flat-fee case.
Typical cost: Usually based on your lawyer’s hourly rate.
There are two main types of retainer fees. Either it’s a set fee you pay into an account that your lawyer withdraws from as costs build up. It could also act as a down payment on your lawyer’s services and establishes that they’re working on your case.
Typical cost: Varies widely depending on lawyer and your case.
Pay your lawyer per hour of work on your case. Rates can vary depending on where you live, your lawyer’s seniority and type of legal work. You’ll typically pay more if you hire a senior partner at a law firm in New York City, for example.
Typical cost: $100 to $400 per hour, as much as $1,000 per hour in specialized legal cases
A fee that covers the total cost of your case, common with cut-and-dry cases like an uncontested divorce or drawing up a will.
Typical cost: Varies by case
Examples: Uncontested divorce flat fee: $200 to $1,500
Estate planning: $300 to $1,200
You agree to pay your lawyer a portion of the amount you’re awarded in your case, if you win. Some lawyers offer this fee on a sliding scale depending on how long it takes to settle the case.
Typical cost: 25% to 40% of your settlement amount
A fee you pay to a lawyer for referring you to other legal representation, usually in the form of a percentage of the total fees your new lawyer earns. Referral fees are restricted to specific situations in some states. Visit your local bar association’s website for more details about when a referral fee is appropriate.
Typical cost: 10% to 50% of total legal fees
A fee set either by a statute or a court that covers your legal costs. Sometimes it’s a percentage of your earnings in a case or a flat rate. Statutory fees are common in bankruptcy or inheritance cases.
Typical cost: Varies by state and type of case
5 tips for keeping your legal fees to a minimum
- Compare lawyers. Shopping around not only lets you find a lawyer that’s right for your case, it’ll also help you get a feel for how much most lawyers charge for your particular type of case — giving you the confidence and leverage you need when you negotiate your fees.
- Have a budget. This seems simple, but knowing exactly how much you can afford to pay in legal fees — including extra financing — can help you weed out lawyers that charge more than you’re able to pay.
- Keep calls quick and to the point. Paying by the hour? Time is money. Don’t waste it with small talk and try to prepare questions ahead of time.
- Be organized. Clearly label and organize your documents and paperwork. Write summaries of key facts that your lawyer can clearly refer to so they don’t have to spend extra time on busywork.
- Ask for six-minute billing increments. Many lawyers give you a choice between six- and 15-minute billing increments. Choosing the smaller one gives your lawyer less of a chance to round bills up and could potentially save you hundreds or even thousands of dollars.
Legal fees can deplete your savings and hurt your finances if you’re not prepared. Luckily, there’s usually a way to find financing if you’re caught by surprise or simply can’t shoulder the cost right away. If you can’t find a lawyer to work pro bono and don’t expect a settlement, a personal loan can be a reasonable solution for any case.
To get the best deal on your legal financing, no matter which way you go, know your rights and your options before agreeing to anything.