The high price of legal defense in the U.S. has hit Americans hard in recent years. One study suggested that people in this country spend about 166% more on legal services than the global average.
So, why does the U.S. spend so much more than other countries on legal services? What impact does the high costs associated with lawyers’ hourly rates, retainers, and contingency fees have on Americans? And which cost-control strategies should people employ to avoid the high price of legal defense in the U.S.?
Find the answers below.
Overview of Legal Defense Costs in the U.S.
It’s one thing for us to tell you that the high price of legal defense in the U.S. is out of control. But rather than simply doing that, let’s dive right into discussing the facts and figures surrounding the outrageous legal fees millions of Americans face.
Here are the latest numbers, according to a 2024 report compiled by Forbes:
- The average hourly rate for American lawyers has surpassed $300 per hour.
- The typical retainer for attorneys in the U.S. is between $5,000 and $10,000, though it fluctuates on a case-by-case basis.
- The normal contingency fee for lawyers nationally is anywhere from 25% to 40%.
Importance of Understanding Legal Expenses
If you ever need to hire a lawyer, you’ll likely experience for yourself the high price of legal defense in the U.S. But as the numbers we just laid out suggest, you won’t always pay different attorneys in the same way.
Here are several ways a lawyer might charge you:
- An hourly fee that calls for you to pay a lawyer for each hour they devote to your case
- A flat fee that requires you to pay a set price for a lawyer to perform legal services on your behalf
- A retainer that has you provide a lawyer with a lump sum payment that they use to cover costs throughout a case
- A contingency fee that allows a lawyer to claim a certain percentage of a settlement or judgment you’re awarded
The simple fact that there are so many different types of legal fee setups has contributed to the high price of legal defense in the U.S. According to the U.S. Bureau of Labor Statistics, it’s not uncommon for today’s lawyers to make well over $100,000 and sometimes even over $200,000 or $300,000.
Factors Contributing to High Legal Defense Costs
The high price of legal defense in the U.S. isn’t anything new. This New York Times article from almost 50 years ago touches on many of the same topics that Americans complain about in 2024 regarding high legal defense costs.
Today’s inflated costs are due to different factors, though. Let’s look at a few of these factors next to see why legal costs are sky-high.
Complexity of Legal Cases
About 65 million court cases are filed in the U.S. each year. This number is down dramatically since just a decade ago when it stood at over 90 million. But it’s still a shockingly high number that showcases just how many cases work their way through the U.S. legal system daily.
Because of major advancements in technology, many cases are also more complex than those filed 50 years ago. This has forced lawyers to spend more time on cases, driving up legal costs.
Attorney Fees and Billing Practices
It can sometimes feel like lawyers’ legal fees and billing practices were designed to confuse Americans. There’s no surefire way for people to keep tabs on exactly how many hours their lawyers are spending on their cases.
Because of this, “double billing” is one of the many issues that impacts the legal industry. Double billing is an unethical practice involving a lawyer billing two different clients for the hours they spent working on their cases, even though they did this work during the same general timeframe.
Duration of Legal Proceedings
A large majority of legal cases never end up going to trial. They’re either settled or dismissed before they reach courtrooms.
However, according to many legal analysts, the country’s court system is needlessly complex. This has led to many cases being tossed around within the system before they’re ultimately settled or dismissed, which can send legal costs skyrocketing.
Court Fees and Filing Costs
According to this Brennan Center for Justice report, just about every state in the U.S. has either seen its criminal and civil court fees spike or incorporated additional fees into its legal process since 2008. Some states, like Florida, have done this to help deal with state fiscal crises, while others like Colorado have made the move to raise funds to update outdated public buildings.
Regardless of why states have chosen to increase their criminal and civil court fees, this decision has undoubtedly played a huge role in the price of legal defense in the U.S.
The Impact of Legal Defense Costs on Individuals
The rapidly rising price of legal defense in the U.S. has started to take a toll on individuals forced to hire lawyers for one reason or another. Check out some ways in which increasing legal defense costs have impacted Americans.
Financial Strain on Defendants
Some simple legal cases, like certain civil cases involving car accidents, cost as little as $10,000. But it’s not out of the ordinary for more complicated cases to cost well over $100,000. This can place a big financial burden on the defendants involved in them, especially if things don’t go their way in court.
Emotional and Psychological Effects
When Americans face lawsuits, in particular, it can cause more than just financial concerns. They also routinely suffer from emotional and psychological effects, including:
- Anxiety
- Stress
- Depression
- Insomnia
- Post-traumatic stress disorder
Access to Justice and Economic Disparities
The high price of legal defense in the U.S. has created so-called “legal deserts” throughout the country. A 2023 Denver Post report, for example, pointed out that about one-third of Colorado’s counties fall into the “legal desert” category. A legal desert is any area with fewer than one lawyer for every 1,000 residents.
These legal deserts have made it difficult, if not impossible, for people in certain pockets of the country to find lawyers to provide legal representation.
Strategies for Managing Legal Defense Costs
If you’re ever facing legal trouble and need to hire a lawyer, there’s no way to avoid the escalating legal costs in this country altogether. You can, however, utilize a handful of cost-control strategies to make your legal defense costs more manageable.
Preventative Measures
To start, here are preventative measures you can put in place in an attempt to avoid having to take or face legal action in the first place:
- Put any agreements you make with other individuals, businesses, and employees in writing
- Carry the right insurance policies based on your specific circumstances
- Take lawsuit threats seriously, no matter how ridiculous they may seem
Choosing the Right Legal Representation
The U.S. is home to over 1.3 million lawyers. Take full advantage of this by searching for the right attorney in your area when you need one. Shop around for a lawyer who will fit into your preferred price range.
Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution, or ADR, is a process that involves two parties trying to resolve a dispute without going through official legal proceedings. Some ADR examples include:
- Mediation
- Arbitration
- Neutral evaluation
Policy and Reform Discussions
Could the high price of legal defense in the U.S. come back down to earth soon? Policy and reform discussions are ongoing, and those involved in them are hoping this will be the case.
Current Legal System and Reforms
Many states, including Arizona, California, Illinois, New Jersey, New Mexico, and Texas, have started to eliminate some court fees and filing costs. This could help stem the tide when it comes to elevated legal costs.
Comparisons With Other Countries
Few countries come anywhere close to spending as much money as the U.S. on legal cases. Canada and the United Kingdom are two of the only countries that spend above the global average on legal costs, like America.
Avoid Lawsuits by Implementing Asset Protection Strategies
Want to avoid the high price of legal defense in the U.S.? Blake Harris Law can help you employ the right asset protection strategies to reduce the risks associated with litigation. Contact us to discover more about our asset protection services.
