Hourly rates are the most common arrangement. Here, the attorney gets paid an agreed-upon hourly rate for time spent working on all aspects of a client's case until it is resolved.

The hourly rate depends on each attorney's experience, operating expenses, and the location of his or her practice. In rural areas and small towns, lawyers tend to charge less, and fees in the range of $100 to $200 an hour for an experienced attorney are probably the norm. In major metropolitan areas, the norm is probably closer to $200 to $400 an hour. Lawyers with expertise in specialized areas may charge much more.

But consider that cheaper isn't necessarily better. A more expensive lawyer with a lot of experience may be able to handle a complex problem more quickly. Also, an experienced attorney will be able to better estimate how many lawyer hours a particular matter will take to resolve.

Where a legal matter is simple and well-defined, lawyers typically charge a flat fee. Examples of flat fee matters include wills, uncontested divorces, and simple bankruptcy filings. If an attorney suggests or has advertised a flat fee, be sure you understand exactly what that fee will and will not cover. The flat fee might not include expenses such as filing fees.

A retainer typically operates as an advance payment on an attorney's hourly rate to handle a specific case. The lawyer puts the retainer in a special trust account and deducts from that account the cost of services as they accrue. During the course of legal representation, clients should review periodic billing statements reflecting amounts deducted from the retainer. (Learn more about Attorney Responsibility for Client Funds.

Most retainers are non-refundable unless labeled "unreasonable" by a court. If you decide to drop a case that your lawyer has worked on before the retainer has been exhausted, you might forfeit the remainder.

In certain types of cases, attorneys work on a contingency fee basis. That means the attorney takes no fee from the client up-front but gets a percentage (typically one-third) of any settlement or money judgment obtained on behalf of the client. Contingency fee arrangements are typical in:

• automobile accident lawsuits
• medical malpractice claims
• other personal injury cases, and
• debt collection cases.