When you hire an attorney in Illinois, you will pay them in one of three ways:

• Flat fee – Typically traffic or misdemeanor criminal cases
• Hourly – Divorces, most civil law suits, commercial litigation
• Contingency – Paid if they win on injury cases, suing for owed life insurance money, class actions, some employment wage cases

It’s up to you and the law firm to agree on what type of fee arrangement to enter in to. No matter what you agree on, your contract with them will likely have a clause that says that they get reimbursed for their expenses. For example, if they have to issue a subpoena for your medical records or take a deposition as they prepare for trial, those things cost money.

Typically the law firm will front the expenses and get reimbursed by you. On contingency cases that happens when the case settles. On hourly cases that would be when you get your (hopefully monthly) bill. There aren’t usually expenses on flat fee cases, but if there were the attorney would have to ask for them since there wouldn’t be a bill.

While being able to get reimbursed for expenses is standard, some law firms in Chicago are doing something that is not standard lately. They are asking for interest on the expenses they pay out on your case. In other words, if they advance $50,000 in costs, which is not unusual for something like a medical malpractice case, they want to get 8% or so interest back on that money.

In the end, that could mean an extra $10,000 or more in their pocket depending on how long the case lasts. To me, while it is allowed, it’s really just a money grabbing exercise and a bit greedy. Fronting expenses is the risk of being an attorney and taking on a case. To try and get interest on those expenses is comparable to “resort fees” at hotels or “convenience charges” by Ticketmaster. It’s just taking more money because you think you can get away with it.

Unlike with the hotel and Ticketmaster, you do have a choice here. You can object and ask that this clause be removed. You can also hire one of the many great firms that don’t do these things to their clients. Whether or not they are allowed to do it isn’t the issue. The issue is should they charge interest and to me the answer is clearly no.

Beyond all of that, I really question how accurate the interest charges are. It’s not like they spend all the expense money at once. It happens over time and they aren’t allowed to charge interest on money that isn’t spent yet. Unless you’ve got a CPA on staff that has years of experience with this, I’d be worried about mistakes in calculating interest.

Finally, some of these firms are not only charging interest, but they are also claiming as expenses petty things like postage stamps, photo copying charges (even when it’s just a couple of pages), gas money, etc. To me those things are the cost of doing business and clearly separate from items like deposition fees, subpoena fees, expert witness pay, etc.

We highly encourage you to read and question any other items in whatever legal document you are given before signing it. If you have any questions about this you can call us any time to speak with a lawyer, at no cost, at 312-346-5320.