Wrongful Termination Claims: How Much Does a Lawyer Cost?

 

If you’ve been fired illegally from your job and are thinking about suing your former employer for wrongful termination, you’re probably also wondering whether you should and can hire a lawyer. And since you just lost your job, the cost of legal help is likely to be high on your list of concerns. We recently surveyed readers across the U.S. who had wrongful termination claims, to find out how—and how much—their attorneys charged. Here’s what we learned.

How Do Wrongful Termination Lawyers Charge for Their Services?

Employment attorneys use different methods of charging for their services in connection with wrongful termination claims:

  • Contingency fees. Under what’s known as a contingency fee arrangement, your attorney receives a fee only if you receive monetary compensation, in the form of an out-of-court settlement or an award after trial. The contingency fee will be a percentage of your total compensation. If you don’t get any money, neither does the attorney.
  • Hourly fees. Attorneys might instead charge a set amount for each hour of work on your case. Often, they’ll ask for an up-front “retainer” (a sort of down payment) against the hourly fees. Then they’ll withdraw the fees as they earn them and give you an accounting of any balance.
  • Combination contingency/hourly fees. Employment lawyers might also ask you to pay a modest up-front retainer fee along with an agreement to pay a percentage of any monetary settlement or award.

Of our readers with lawyers, 75% paid a contingency fee, 10% paid hourly fees, and 15% paid a combination of the two. There’s a good reason for these results. Wrongful termination cases can take a lot of time for an attorney to prepare, and hourly fees can be very expensive. So lawyers commonly agree to contingency fees (with or without a small up-front retainer) because the average employee simply couldn’t afford to hire them otherwise.

How Much Are Typical Attorneys’ Fees?

When lawyers agree to work on your case for a contingency fee, the percentage they’ll charge can vary quite a bit—from less than 25% to more than 40%—depending on where you live and the individual attorney. Most of our readers paid between 30% and 35%, with an overall average of just under 30%. These results fall in line with the common practice among lawyers to charge about one-third of settlements reached before a trial date is set. After that, the percentage often increases, because attorneys have to put in a lot more work to prepare for trial. Based on the average settlement or award received by our readers who had attorneys ($48,800), along with the average contingency fee percentage (29%), typical attorneys’ fees paid by our readers might be about $14,200. If this seems like a lot, remember that the lawyer only receives this money if you get a monetary settlement or award—and that’s after putting in dozens if not hundreds of hours of work on your case.

Hourly fees can also differ significantly from city to city and from lawyer to lawyer. Our survey reflected this variance: Readers reported paying hourly rates ranging from less than $100 to more than $300, but most of them paid between $150 and $350 an hour. Attorneys are more likely to use lower rates when they’re charging a combination of hourly and contingency fees—and lawyers in big cities are more likely to charge fees at the higher end of the spectrum.

Can You Get a Better Rate?

If a lawyer has quoted you an hourly rate that you can’t afford, you can always try to negotiate. And if the attorney refuses to budge, you have the option of shopping around for another lawyer who charges less or is more willing to work solely on a contingent basis. You might also consider hiring a lawyer for what’s known as a “limited scope” representation. For example, you could ask an attorney to review a severance agreement, write a demand letter to your former employer, or help prepare for a wage hearing that you’ll attend on your own. In those situations, you might pay for only few hours (or less) of the lawyer’s time.

How Do Lawyers Charge for Expenses?

Depending on how far your case proceeds, there can be other expenses like court filing fees, expert witness fees, and the costs of depositions. Here again, lawyers have different ways of arranging for clients to pay these costs. They may:

  • ask you for a “cost retainer” and then withdraw from that fund as needed
  • ask you to pay the costs as they come up, or
  • agree to advance the costs and deduct them from any settlement or award that you receive.

Our readers reported that more than 40% of their lawyers advanced the costs of pursuing their wrongful termination claims, with the other payment methods nearly evenly split.

Is a Lawyer Worth the Cost?

Our survey showed that readers who hired lawyers were more than twice as likely to receive a settlement or award, compared with those who pursued wrongful termination claims on their own. Those with attorneys also received significantly more monetary compensation, on average, even after paying the legal fees. (For more details, see our article on the difference a lawyer makes in wrongful termination cases.) In light of these results, it’s not surprising that readers who had lawyers were also more than three times as likely to be satisfied with the outcome of their wrongful termination case.

What If You’re Having Trouble Finding an Attorney?

Our survey showed that 62% of readers didn’t hire an attorney to help them pursue their wrongful termination claims. When we asked why not, the most common reasons were that lawyers told them:

  • their former employers’ actions didn’t amount to an illegal firing
  • there wasn’t enough evidence of illegal actions, and/or
  • they hadn’t suffered enough monetary damages (such as lost wages and benefits).

Even if the circumstances of your firing feel unfair or just plain wrong, they may not be illegal. A termination is wrongful under the law only if you were fired or forced to quit for certain reasons, such as illegal discrimination or harassment. (For more details, see our article on illegal and legal reasons for firing.) Employment attorneys know the law, and they know how to evaluate the evidence and determine whether you have a strong case and have suffered significant damages—both of which are likely to lead to a settlement or award. If not, you’ll probably have a hard time finding a lawyer who’s willing to take your case on a contingency fee basis. But it’s always worth talking to several attorneys to discuss your options.

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