Who pays my attorney fees?

Question:

If I file a lawsuit and I win the other side will pay my attorneys’ fees, right? How do I get my fees back?

Answer:

In the US, we follow what is known as the “American Rule.” Almost across the board, the presumption is that each party to a lawsuit will pay its own attorneys’ fees. That means that unless there is an applicable exception to the rule, you should expect to pay your own fees. There are two types of exceptions. The first is a rule in a statute – so, if a statute allows for attorneys’ fees to be recovered, they can be requested. In the lawsuit, you would have to win on that cause of action, however, and a judge would have discretion as to whether you get your fees and how much in fees you should be permitted to recover. The amount you actually paid your attorney is considered but is not binding on the judge. The other exception lies in a written contract. If a contract contains an attorneys’ fee provision (something along the lines of “the party prevailing in any legal action related to this agreement is entitled to recover their attorney’s fees”), then fees can be recovered for the breach of contract. Again, you would have to win the lawsuit’s breach of contract component, and a judge has discretion as to whether and how much to award.

Even if you are awarded fees, you have collection considerations. Just like any judgment, a judgment for attorney’s fees must be collected. You can do this by placing liens on property, garnishing wages, etc. But, collection can be an onerous process that takes years. Your attorney will not wait to be paid until you collect. So, you should expect to pay your attorney out of your own pocket as the case proceeds and hope for some recovery on the back end if all goes well with judgment and collections. This is why most attorneys warn clients to expect to foot the bill for attorney services, even if fee collection is possible. Keep this reality in mind when you decide whether to start a lawsuit and when settlement discussions arise. You don’t want to be in a situation where you spend $20,000 to recover the $15,000 someone owes you (or a similar scenario). Attorney’s fees are a key component in considering the efficiencies of a case, even where they can be recovered.