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Attorneys' Product

As professionals, physicians and attorneys charge for the exercise of professional judgment. Most physicians charge based on procedures and patient encounters. These tend to be fixed charges that are independent of either the results or the time actually spent on the procedure. Some physicians, such as anesthesiologists, have charges that are related to the time spent with the patient. Physicians also charge for services performed by their staff.

Attorneys have more open-ended charge structures. Basically they sell their time and the time of their staff. Plaintiff's attorneys usually work on a contingent fee. Fixed fees are used in certain routine matters such as divorces and in most criminal defense cases. Criminal attorneys also demand the fee in advance, since unsuccessful clients have little incentive to pay the attorney's fees. Although the basic fee arrangement is the same for physicians and attorneys, there are two critical differences: except for insurance defense work, legal fees are usually paid by the client rather than by a third party, and legal fees can be much higher for individual transactions.

In most parts of the country, attorney's fees range from $75 to $400 per hour, with certain specialists charging up to $1000 an hour. Within a large law firm, the younger, less experienced attorneys are billed at a lower rate than the senior members of the firm. Nonattorney support personnel are also billed on an hourly basis. These may include nurses, physicians, engineers, certified public accountants, and other nonattorney professionals whose expertise is necessary for the proper preparation of a case. They also include law students and paralegals who work on client matters. The client is billed for every minute that law firm personnel spend on activities related to the client's case. If an attorney does the work, the client pays the attorney's hourly rate. It does not matter that the attorney is doing work that does not require the exercise of legal judgment. The rates are the same for solving a difficult analytical issue as for making telephone calls to schedule a deposition.

Business and defense attorneys pass all expenses through to the client. These range from a few dollars for photocopying and messenger charges to expert witness fees in the thousands of dollars. The client sometimes pays the bills directly, although in most cases, the law firm includes the expenses with the professional services bill. The client pays the aggregate charges, and the law firm pays the outside vendors. Expenses in a simple collection matter may be $100. Expenses in the defense of a medical malpractice case may be $30,000 or more.

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