Attorneys generally charge their clients in one of three ways: (1) an agreed hourly rate, times the number of hours the attorney spends on the matter; (2) a contingent fee, in which the attorney receives a percentage of the amount recovered or received by the client in the matter; or (3) a fixed-fee in which the attorney charges an agreed amount (often with some or all of the fee paid before work begins). If the attorney is charging on an hourly basis, he may require a fee deposit (sometimes called a retainer) to secure payment of the hourly fees. The client may be required to replenish this fee deposit. The attorney must hold the unearned fee deposit in her trust account until she does the work and is entitled to some or all of the payment.
In Indiana, attorneys may charge clients using one of three common fee structures: hourly rates, contingent fees, or fixed fees. An hourly rate is calculated by multiplying the attorney's agreed-upon hourly fee by the number of hours worked on a client's case. A contingent fee arrangement involves the attorney receiving a predetermined percentage of the client's recovery or settlement in a case, which means the attorney only gets paid if the client wins or settles the matter. Fixed fees are set amounts charged for specific legal services, and payment is often required upfront before work commences. When an attorney charges by the hour, they may request a fee deposit, also known as a retainer, to ensure payment for future services. This retainer must be replenished if it runs low, according to the agreement between the attorney and the client. Importantly, any unearned portion of the fee deposit must be kept in the attorney's trust account until the attorney has earned it through work performed on the case. These practices are regulated by the Indiana Rules of Professional Conduct, which provide guidelines to ensure ethical and fair billing practices.