Part 2 – Litigation Costs.
I read in Senator Harry Reed’s autobiography about a criminal defense attorney who practiced law in the 1960’s and 1970’s who would say when asked how much he will cost to defend a felony murder case “everything you’ve got!” Well that sounds a bit excessive! But many clients fear just that, and for good reason because attorneys’ fees in litigation matters are a complete mystery—even to most attorneys.
So the best way to look at litigation fees is what services are you receiving for the money you are paying. There’s no way around it, lawyers are expensive. But what you want to do is obtain as much in services as you can for the money you pay. In other words, as a client you should be looking for value. If you pay a lot, but in exchange you receive aggressive representation that moves your case along and positions your side for either a good settlement or as much chance of winning at trial as is possible, then that’s money well spent. If you pay the same amount and merely receive a stack of letters and emails between attorneys, then that’s a waste of money.
To move your case along and put you in the best position possible, takes work…and work is money. Things like depositions, subpoenas, expert opinions, written document demands of your opponent (and motions to compel when your opponent refuses to respond properly) are necessary to prepare your case for trial. And a prepared case gives you the best shot of winning or obtaining a great settlement. If you are not prepared, then you are in big trouble.
So what does preparation cost you? Well let’s break it down into different levels based on the amount of time your matter spends in Court before reaching either a settlement or a trial court decision.
Level 1: $15,000 to $20,000. I always say that everyone who enters the litigation arena will spend a MINIMUM of $15,000 to $20,000 even if your case settles early. What do you get for this money? Well if you are the party initiating the lawsuit, it will cost around $5,000 to draft up the initial petition (I am talking Will and Trust cases here, but civil cases are similar). The filing fee and service of the petition will cost around $500 to $750 in hard costs. You then have your first Court hearing, initial round of discovery and maybe your first deposition and you hit the $15,000 to $20,000 mark.
Level 2: $20,000 to $50,000. If you case does not settle early, then its on to level two where you get into far more depositions and maybe a few discovery disputes. As part of discovery you can subpoena bank and medical records and demand documents from the opposing party. If someone objects to what you are doing, or refuses to comply, then its on you to take them to Court on a Motion to Compel. A typical Motion requires the initial filing, and then a reply when the other side files their opposition, plus a court hearing on the Motion. All told a single Motion can cost from $4,000 to $8,000 or more in time.
As for depositions, those are pricey too. It can cost from $4,000 to $6,000 per deposition. That includes the court reporter fee, which can be anywhere from $600 to $1,500 per deposition (court reporters charge by the page, so the longer the deposition, the more expensive).
And maybe you have a mediation or Mandatory Settlement Conference, which requires a brief be prepared and attorneys spending all day in a mediation setting.
All told, level two usually will get you through mediation.
Level 3: $50,000 to ???. If your case does not settle after mediation, then its off to the races. That means trial. And trial preparation is time consuming, if done right. You can easily spend $25,000 or more on trial preparation. Then there are usually additional motions at this stage, and maybe one of the party files a Motion for Summary Judgment, which can cost from $25,000 to $50,000 to either prepare or defend against in its own right.
And then there is trial, which can cost from $10,000 on up depending on how long trial takes. For most cases that are litigated through trial, you will spend (from start of the case to finish of trial) from $80,000 to $150,000 or more. This last phase is by far the most expensive because this is when the cards are down and you’re either “all-in” for trial or you get out. There’s no way to do trial on a half-hearted effort, not if you hope to win.
Well there you have it. Litigation is an expensive proposition. But sometimes you have little choice but to stick up for your rights, and our Court process is the only forum you have to force a decision in your case. The key is to properly value your case (are you investing wisely in your legal claim), and get the appropriate level of service for your money.