Minnesota Employment Law: Legal Fees

Often times people are afraid to seek legal advice because they are not sure if they can afford a lawyer.  Legal fees can be significant, depending on the type and complexity of the case involved.  For people who have suffered employment discrimination or who have been wrongfully terminated, the fear of additional expense is a very real concern.  Law firms employ a variety of fee structures to help people obtain representation regardless of their financial background.

Employment Law Cases: Statutory Fees

Legislators have recognized that the cost of bringing a claim may prevent some people from pursuing legitimate discrimination or other employment cases.  As a result, several statutes provide that you are entitled to recover your attorney’s fees in addition to your damages.   If you bring a claim under some federal antidiscrimination laws, reasonable attorney fees are part of your recovery.  See 42 U.S.C. Section 2000e-5(a).  Similarly, if you bring a claim under the Fair Labor Standards Act for overtime or other pay claims, you may be entitled to recover your legal fees.

The advantage to this system is that people have access to legal representation without incurring huge legal bills.  If an employee has a claim for $10,000 in unpaid overtime, it would be difficult for the employee to pay $5,000 in legal fees in order to get $10,000 in damages.  The attorney may also struggle to work on contingency fee if the fee does not reflect the amount of work performed to obtain recovery. For an attorney billing $300 an hour, it would only take 10 hours of work to exhaust a 1/3 contingency fee on $10,000.

Courts determine whether the claimed attorney’s fees are reasonable under the statute.  The lawyer usually must show the amount of work performed and the typical hourly rate for performing the work.  This yields the total claim for legal fees.  The judge examines whether the claimed hours are legitimate and if the hourly rate is in line with other attorney’s performing similar work with similar experience in the area.  Statutory attorney’s fees can be an important tool in encouraging employers to settle claims early.  They have little incentive to keep litigating if the amount they have to pay the plaintiff’s attorney continues to grow while their defense does not get any stronger.

Hourly Fees and Retainers

In some cases it makes sense to use an hourly rate rather than a contingency claim.  This is particularly true if the case involves a high risk of failing.  A retainer is just an advance deposit towards hourly attorney’s fees.  Many lawyers will require payment of a retainer before they begin work.

The Combination Method

In employment law cases, often lawyers will use some sort of mixture of compensation methods.  A case may be too high risk to be purely a contingency fee case, but the client may not have the funds to pay thousands of dollars in legal fees.  The lawyer agrees to work for a reduced hourly rate in exchange for a reduced contingency fee on any final recovery.  This method balances the client’s lack of funds with the attorney’s desire to have some payment security.

Contact a Minnesota Employment Lawyer

The attorneys at Twin Cities Law Firm can be retained to handle a variety of employment law issues, such as reviewing contracts or severance agreements.  Our attorneys work primarily on an hourly basis.