What Is Fee-Shifting?

Use these links to jump to different sections:

• How Does Fee-Shifting Work?
• Vindicating Your Consumer Rights

Common perception holds that lawyers are money-sucking predators, charging exorbitant rates to fuel extravagant lifestyles. And to be fair, in every stereotype there resides some nugget of truth. However, the reality is that most attorneys get into the profession as a means to help others. Yes, they like to keep the lights on and feed their kids, but getting rich is not necessarily the driving force. Lawyers get that lawyers are expensive for regular folks. With the goal of making legal representation accessible and affordable, some attorneys have sought to build their practice around a financial model known as fee-shifting.

How Does Fee-Shifting Work?

In fee-shifting, the client typically does not pay attorney fees. Attorneys get paid either from the proceeds of the lawsuit, by the other party, or by a governmental entity. The term “shifting” is something of a misnomer in that it suggests the burden is on the plaintiff to pick up the tab until that responsibility shifts to another party. Rather, the name stems from a more global shift away from traditional American practice. “In the U.S., you don’t have a right to recover attorney fees when you file a lawsuit, unless the law or the contract involved say that you do,” says Dayton consumer law attorney Ronald Burdge. “So, you start with a presumption that you don’t have a right to recover attorney fees, and these laws then shift that right.” Many fee-shifting claims arise in the consumer law setting, where individual losses can be too minimal to justify hiring an attorney, yet the cumulative effect of such small harms is to incentivize abuse. “In the old days,” recalls Burdge, “before 1973, when a lot of these consumer protection laws kicked in, you could file a lawsuit, win the case, and when you finished counting the money, it cost you more to fight it than you were out in the first place. Which is the whole purpose: They’re trying to make the law cost-effective for the consumer to assert their legal rights.” The average hourly rate for a consumer protection attorney in the United states is $350, Burdge says. “So if you had to pay for that, there are a lot of people who couldn’t afford to do it. People are often surprised to learn that they don’t have to pay their attorney.” At the outset of a claim, the consumer law client will enter into an agreement with their lawyer regarding how attorney fees and the costs of litigation will be paid. Specific practices vary, but typically, the client does incur some up-front expense in the way of a modest deposit toward costs, as well as a small retainer. Once the matter is resolved, either by settlement or verdict, coverage of fees and costs is included in the final amount due, and the claimant is reimbursed.

Vindicating Your Consumer Rights

As noted, fee-shifting is a practice commonly seen in consumer claims, including under a number of federal consumer protection laws like the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Telephone Consumer Protection Act, and under consumer product warranty rights. “If you get a bad car, if you’ve been discriminated against, if your credit rights are violated, if you’re being harassed or there’s a class action case that you may be a member of—all of those things would qualify for fee-shifting,” Burdge says. If you’ve encountered one of these types of problems and have been holding off on consulting with a lawyer for fear you can’t afford it, you don’t have to worry. Talk to a reputable consumer rights attorney for help assessing your claim under a fee-shifting arrangement. For more information on this area of law, see our overview of consumer law or reach out to a law firm for legal services.