Insurance

Let's face it: Starting and running any type of business has risks. Recognizing the risks in all areas of your business--management, marketing, contracts, personnel and the particular ramifications of your product or service on customers and the market--is the first step in effective risk management.
One of the smartest moves any business owner can make is having enough of the right kinds of insurance. Not only does this protect your business's assets from risks that could very well reduce them to nothing if a catastrophe struck, it also safeguards your personal assets, which are often on the line, from a liability point of view.
What kind of risks should you be concerned about? If you have employees, you're obligated to:

• Provide a safe place to work,
• Employ individuals reasonably competent to carry out
• Warn employees of danger,
• Furnish appropriate and safe tools, and
• Set up and enforce proper rules of employee conduct as they relate to safe working procedures.

You also owe a degree of safety and concern to your customers, clients, and the public--not only for their physical well-being when they're doing business with you but also to protect their property.
The basic business insurance package (not including health insurance) consists of four fundamental coverages--workers' compensation, general liability, auto and property/casualty--plus an added layer of protection over those, often called an umbrella policy. In addition to these basic needs, you should also consider purchasing business interruption coverage and life and disability insurance.

Workers' Compensation

Workers' compensation, which covers medical and rehabilitation costs and lost wages for employees injured on the job, is required by law in all 50 states. Workers' comp insurance consists of two components, with a third optional element. The first part covers medical bills and lost wages for the injured employee; the second encompasses the employer's liability, which covers the business owner if the spouse or children of a worker who's permanently disabled or killed decide to sue. The third and optional element of workers' compensation insurance is employment practices liability, which insures against lawsuits arising from claims of sexual harassment, discrimination and the like. According to the Independent Insurance Agents of America (IIAA), it's often hard for small companies to get workers' comp insurance at reasonable rates. Consequently, some states have a risk-sharing pool for firms that can't buy from the private market. Typically state-run and similar to assigned risk pools for car insurance, these pools generally don't provide the types of discounts offered in the voluntary market and thus are an "insurance of last resort."
Because insurance agents aren't always up-to-date on the latest requirements and laws regarding workers' comp, you should check with your state, as well as your agent, to find out exactly what coverage you need. Start at your state's department of insurance or insurance commissioner's office.
Generally, rates for workers' comp insurance are set by the state, and you purchase insurance from a private insurer. The minimum amount you need is also governed by state law. When you buy workers' comp, be sure to choose a company licensed to write insurance in your state and approved by the insurance department or commissioner.
If you are purchasing insurance for the first time, the rate will be based on your payroll and the average cost of insurance in your industry. You'll pay that rate for a number of years, after which an experience rating will kick in, allowing you to renegotiate premiums.
Depending on the state you are located in, the business owner will be either automatically included or excluded from coverage; if you want something different, you'll need to make special arrangements. While excluding yourself can save you several hundred dollars, this can be penny-wise and pound-foolish. Review your policy before choosing this option, because in most states, if you opt out, no health benefits will be paid for any job-related injury or illness by your health insurance provider.
A better way to reduce premiums is by maintaining a good safety record. This could include following all the Occupational Health and Safety Administration guidelines related to your business, creating an employee safety manual and instituting a safety training program.
Another way to cut costs is to ensure that all jobs in your company are properly classified. Insurance agencies give jobs different classification ratings depending on the degree of risk of injury.

General Liability

Comprehensive general liability coverage insures a business against accidents and injury that might happen on its premises as well as exposures related to its products. For example, suppose a visiting salesperson slips on a banana peel while taking a tour of your office and breaks her ankle. General liability covers her claim against you. Or let's say your company is a window-sash manufacturer, with hundreds of thousands of its window sashes installed in people's homes and businesses. If something goes wrong with them, general liability covers any claims related to the damage that results.
The catch is that the damage cannot be due to poor workmanship. This points to one difficulty with general liability insurance: It tends to have a lot of exclusions. Make sure you understand exactly what your policy covers...and what it doesn't.
You may want to purchase additional liability policies to cover specific concerns. For example, many consultants purchase "errors and omissions liability," which protects them in case they are sued for damages resulting from a mistake in their work. A computer consultant who accidentally deletes a firm's customer list could be protected by this insurance, for example.
Companies with a board of directors may want to consider "directors' and officers' liability" (D&O), which protects top executives against personal financial responsibility due to actions taken by the company.
How much liability coverage do you need? Experts say $2 million to $3 million of liability insurance should be plenty. The good news is that liability insurance isn't priced on a dollar-for-dollar basis, so twice the coverage won't be twice the price.
The price you'll have to pay for comprehensive general liability insurance depends on the size of your business (measured either by square footage or by payroll) and the specific risks involved.

Auto Insurance

If your business provides employees with company cars, or if you have a delivery van, you need to think about auto insurance. The good news here is that auto insurance offers more of an opportunity to save money than most other types of business insurance. The primary strategy is to increase your deductible; then your premiums will decrease accordingly. Make sure, however, that you can afford to pay the deductibles should an accident happen. For additional savings, remove the collision and comprehensive coverage from older vehicles in your fleet. Pay attention to policy limits when purchasing auto coverage. Many states set minimum liability coverages, which may be well below what you need. "If you don't have enough coverage, the courts can take everything you have, then attach your future corporate income, thus possibly causing the company severe financial hardship or even bankruptcy," says Mike Fox, an account executive with Wausau Insurance Companies. "I recommend carrying at least $1 million in liability coverage."

Property/Casualty Coverage

Most property insurance is written on an all-risks basis, as opposed to a named-peril basis. The latter offers coverage for specific perils spelled out in the policy. If your loss comes from a peril not named, then it isn't covered. Make sure you get all-risks coverage. Then go the extra step and carefully review the policy's exclusions. All policies cover loss by fire, but what about such crises as hailstorms and explosions? Depending on your geographic location and the nature of your business, you may want to buy coverage for all these risks.
Whenever possible, you should buy replacement cost insurance, which will pay you enough to replace your property at today's prices, regardless of the cost when you bought the items. It's protection from inflation. (Be sure your total replacements do not exceed the policy cap.)
For example, if you have a 30,000-square-foot building that costs $50 per square foot to replace, the total tab will be $1.5 million.
But if your policy has a maximum replacement of $1 million, you're going to come up short. To protect yourself, experts recommend buying replacement insurance with inflation guard. This adjusts the cap on the policy to allow for inflation. If that's not possible, then be sure to review the limits of your policy from time to time to ensure you're still adequately covered.

Umbrella Coverage

In addition to these four basic coverages (workers' comp, general liability, auto and property/casualty), many insurance agents recommend an additional layer of protection, called an umbrella policy. This protects you for payments in excess of your existing coverage or for liabilities not covered by any of your other insurance policies.

Business Interruption Coverage

When a hurricane or earthquake puts your business out of commission for days--or months--your property insurance has it covered. But while property insurance pays for the cost of repairs or rebuilding, who pays for all the income you're losing while your business is unable to function? For that, you'll need business interruption coverage. Many entrepreneurs neglect to consider this important type of coverage, which can provide enough to meet your overhead and other expenses during the time your business is out of commission. Premiums for these policies are based on your company's income.

Life Insurance

Many banks require a life insurance policy on the business owner before lending any money. Such policies typically take the form of term life insurance, purchased yearly, which covers the cost of the loan in the event of the borrower's death; the bank is the beneficiary. Term insurance is less costly than permanent insurance at first, although the payments increase each year. Permanent insurance builds equity and should be considered once the business has more cash to spend. The life insurance policy should provide for the families of the owners and key management. If the owner dies, creditors are likely to take everything, and the owner's family will be left without the income or assets of the business to rely on.
Another type of life insurance that can be beneficial for a small business is "key person" insurance. If the business is a limited partnership or has a few key stockholders, the buy-sell agreement should specifically authorize this type of insurance to fund a buyback by the surviving leadership. Without a provision for insurance to buy capital, the buy-sell agreement may be rendered meaningless.
The company is the beneficiary of the key person policy. When the key person dies, creating the obligation to pay, say, $100,000 for his or her stock, the cash with which to make that purchase is created at the same time. If you don't have the cash to buy the stock back from the surviving family, you could find yourself with new "business partners" you never bargained for--and wind up losing control of your business.
In addition to the owners or key stockholders, any member of the company who is vital to operations should also be insured.

Disability Insurance

It's every businessperson's worst nightmare--a serious accident or a long-term illness that can lay you up for months, or even longer. Disability insurance, sometimes called "income insurance," can guarantee a fixed amount of income--usually 60 percent of your average earned income--while you're receiving treatment or are recuperating and unable to work. Because you are your business's most vital asset, many experts recommend buying disability insurance for yourself and key employees from day one. There are two basic types of disability coverage: short term (anywhere from 12 weeks to a year) and long term (more than a year). An important element of disability coverage is the waiting period before benefits are paid. For short-term disability, the waiting period is generally seven to 14 days. For long-term disability, it can be anywhere from 30 days to a year. If being unable to work for a limited period of time would not seriously jeopardize your business, you can decrease your premiums by choosing a longer waiting period.
Another optional add-on is "business overhead" insurance, which pays for ongoing business expenses, such as office rental, loan payments and employee salaries, if the business owner is disabled and unable to generate income.

Health insurance

ealth insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity

Click here to find out more! Representation Agreement: Your Attorney and You

No matter which state you live in, or how well you know your attorney, you should always enter into a written representation agreement (sometimes called a fee agreement) with your lawyer.  These contracts normally set out the terms of the attorney-client relationship as well as the fees and compensation that the attorney is due.
While some attorneys may use very formal contracts for a representation agreement, often running many pages in length, other lawyers will use simple, one page letters.  The length and complexity of the contract doesn't matter as much as the content.  The agreement should carefully outline and explain certain issues, such as how much and when the lawyer will be paid, who is responsible for the court fees, and who will work on the case, whether it is a paralegal or a lawyer.

Reasons to have a Written Representation Agreement

The simple reason to have a written agreement with your attorney is to make sure that both parties to the contract know what is going on.  Most disputes that arise between lawyers and their clients are about money, whether it is how much the attorney is owed, or how much the client is owed as a refund.  In order to resolve these disputes quickly and without the need for court intervention, it is best to have a written contract in place that can clear up these issues.  It is highly effective to be able point to a specific part of a written contract in order to prove your point.
There are other reasons (unrelated to money) to have a written representation agreement. For instance, if you only want licensed attorneys work on your case, and not paralegals, then this can be put in the terms of the contract.
These representation agreements are also a great way of laying out how the client wants his relationship with his attorney to work.  For example, more "hands-on" clients may wish to have his or her attorney call with a status update once a week.  This can be added into the terms of the agreement.
Finally, putting the agreement in writing forces both client and attorney to be very clear about what is expected of each other.  Oral representation agreements may be subject to different interpretations, depending upon the side.  However, a written representation agreement makes both attorney and client explicitly aware of the terms and scope of the contract.

What to Include in Your Representation Agreement

Your representation agreement should clearly include the attorney's fees. associated costs, and how and when this money is to be paid.  In addition, lawyers work on different pay structures, so be sure that this term is included in the agreement.  In general, attorneys will either work on an hourly, fixed or contingency fee basis.
Hourly fee -- For many types of cases, this is the most common way that an attorney will be paid.  Just like paying an hourly employee, clients will be expected to pay their attorney for each hour, or part of hour, that the lawyer works on the case.  Rates typically vary from as little as $75 per hour to more than $500 per hour.  In addition, a client should be expected to pay for time spent on the case by other people in the office, such as paralegals.  The rates for these workers will normally ring in between $40 and $80 per hour.
If you and your attorney have agreed upon an hourly fee arrangement, then the representation agreement should lay out some of the terms.  For instance, the contract should state how often the lawyer will be paid (weekly, monthly, yearly, after the case is over, etc), and how much detail the bill will include (what time was spent on what matter).  In addition, there should also be some mention of how the client could go about challenging the attorney's time spent on some task.
Fixed fee -- This is a fairly new method that attorneys sometimes use to bill their clients.  Under this fee structure, an attorney will charge a client a fixed amount for a certain type of case.  This is generally used by attorneys that do one type of case or transaction multiple times.  For example, an attorney may charge a client $5,000 for handling a rear-end collision case.  For this type of arrangement, the representation agreement should include terms that do not allow the attorney to charge more than the agreed upon amount.
Contingency fee -- This type of fee arrangement is often used in personal injury cases.  This is great for clients that do not have a lot of money to pay attorneys up front.  Instead, the attorney agrees to take the case in exchange for a certain percentage of whatever award is issued at the end of the representation.  If the client loses the case, then the attorney does not get paid.
If you have agreed upon a contingency fee arrangement, you representation agreement should include terms that set out what percentage of the eventual award or settlement the attorney will receive.  Common contingency fees range from 20% to 40%.  As well, some attorneys change their percentage depending on whether the case goes to trial, or if the case is settled beforehand.  This should also be included in the agreement.

Power of Attorney and Representation Agreements

Script 180 gives information only, not legal advice. If you have a legal problem or need legal advice, you should speak to a lawyer. For the name of a lawyer to consult, call Lawyer Referral at 604.687.3221 in the lower mainland or 1.800.663.1919 elsewhere in British Columbia. This script discusses both powers of attorney and representation agreements, starting with powers of attorney. What is a power of attorney? A power of attorney is a document that appoints another person, called an “attorney,” to make financial and legal decisions for you. A power of attorney can be very specific For example, you may give your daughter a power of attorney just to cash your old age security pension cheques for you. In fact, you can get power of attorney forms for cashing these cheques at your local federal Service Canada office. Your bank can also give you a form if you need a power of attorney for a specific bank account. A power of attorney can also be very general If you wish, you can give your attorney very wide powers to deal with all of your assets. There are specific rules for powers of attorney dealing with real estate The Land Title Act requires the attorney to do certain things and follow certain procedures, and there are certain rules that apply. For example, a power of attorney dealing with real estate is only valid for three years from the date of signing, unless otherwise specified or unless it is an enduring power of attorney as described in the Power of Attorney Act. You can get a copy of the Land Title Act at your local library or find it on the government’s legislation website at www.legis.gov.bc.ca. But because real estate involves large amounts of money, you should consult a lawyer for real estate transactions rather than trying to do it yourself. Who should you appoint as your attorney? Consider carefully who to appoint as your attorney and the powers you want to give. It’s important that you trust that person’s honesty and judgment. If you have no family member or friend that you can or want to appoint, you can appoint a respected professional such as your lawyer, accountant or trust company. As a power of attorney gives your attorney very broad power, it can cause you a lot of harm if misused. Does the person you appoint have to act as your attorney? No. Merely granting a power of attorney to someone (and even delivering the written document to them) doesn’t mean that this person has to act as your attorney if they don’t want to. The attorney doesn’t have to take any specific steps to say “no,” or to later decline to act if they no longer wish to be the attorney. How do you end a power of attorney? The most effective way to terminate a power of attorney is to give your attorney a written notice saying that their power has ended, and preferably also to destroy all originals or duplicates of the document (to prevent misuse by the terminated attorney). To cancel or revoke a power of attorney dealing with land, you must file a document called a “Notice of Revocation” in the Land Title Office where the land is registered. The court can also terminate a power of attorney – this might happen if your attorney abuses their power. It’s also possible to put an end-date in the document itself. A power of attorney automatically ends in certain circumstances It automatically ends when you die or if you become bankrupt. It also ends if you become mentally incompetent, unless you say that the power should continue, and then you’ve made an “enduring power of attorney.” What is an enduring power of attorney? An enduring power of attorney allows your attorney to make the necessary financial and legal decisions for you in case you become mentally incapable because of age, accident or illness. To make an enduring power of attorney, the document must say that the agreement will continue to be in effect if you’re no longer able to make decisions for yourself. When is an enduring power of attorney useful? An enduring power of attorney may help avoid having the court appoint a “committee” of one or more people to look after your legal and financial affairs in the event that you become mentally incompetent. A committee appointment is much more expensive than making an enduring power of attorney. What decisions can be delegated with a power of attorney? A power of attorney is used to delegate financial and most legal decisions. This is true for both a power of attorney and an enduring power of attorney. But your attorney cannot make medical or health care decisions for you, such as consenting to surgery or dental work for you. For these decisions, you need to make what’s called a “representation agreement.” What is a representation agreement? The Representation Agreement Act allows you to appoint someone as your legal representative to handle your financial, legal, personal care and health care decisions, if you’re unable to make them on your own. The document is called a representation agreement, and it creates a contract between you and your representative. Your representative has certain duties they must follow For example, your representative must consult with you, as much as is reasonable, to determine your wishes. Generally speaking, unless your representative is your spouse, the representation agreement must name another person as a “monitor” to help ensure that the representative lives up to their duties, or the agreement must state that a monitor isn’t required. Are there different types of representation agreements? There are two types: Section 7 limited agreement – to cover straightforward, everyday decisions Section 9 general agreement – to deal with complex legal, personal care and health care matters A Section 9 agreement is needed for your representative to make such decisions as refusing life support if you become terminally ill. Do you need a lawyer to make a representation agreement? The law says you must consult a lawyer to make a Section 9 agreement, but you should actually see a lawyer for both agreements. A lawyer can help you to understand the wide range of issues that arise with a representation agreement. Can you register these documents somewhere? At the Nidus Personal Planning Resource Centre & Registry, you can register both enduring powers of attorney and representation agreements. Hospitals, banks and government services can search there to find out who your attorney or representative is if they need to. See www.nidus.ca. Summary A power of attorney is a document that allows you to give another person, called the attorney, the authority to act for you in financial and legal matters. The power can be as specific or as general as you wish. But unless you use an enduring power of attorney, it will automatically end if you become mentally incompetent. A representation agreement, on the other hand, can cover personal care and health care decisions, as well as certain financial and legal decisions, if you’re unable to make them on your own. Where can you find more information? The Public Guardian and Trustee of British Columbia has detailed information on powers of attorney, representation agreements and court orders appointing a committee to look after the affairs of a person who is mentally incapable. Their phone number is 604.660.4444 in Vancouver and their website is www.trustee.bc.ca.

REPRESENTATION

REPRESENTATION

A representation is a collateral statement, either by writing not inserted in the policy, or by parol, of such facts or circumstances relative to the proposed adventure, as are necessary to be communicated to the underwriters, to enable them to form a just estimate of the risk.
A representation, like a warranty, may be either affirmative, as where the insured avers the existence of some fact or circumstance which may affect the risk; or promissory, as where he engages the performance of, something executory.
There is a material difference between a representation and a warranty.A warranty, being a condition upon which the contract is to take effect, is always a part of the written policy, and must appear on the face of it. Whereas a representation is only a matter of collateral information or intelligence on the subject of the voyage insured, and makes no part of the policy. A warranty being in the nature of a condition precedent, must be strictly and literally complied with; but it is sufficient if the representation be true in substance, whether a warranty be material to the risk or not, the insured stakes his claim of indemnity upon the precise truth of it, if it be affirmative, or upon the exact performance of it, if executory; but it is sufficient if a representation be made without fraud, and be not false in any material point, or if it be substantially, though not literally, fulfilled. A false warranty avoids the policy, as being a breach of the condition upon which the contract is to take effect; and the insurer is not liable for any loss though it do not happen in consequence of the breach of the warranty; a false representation is no breach of the contract, but if material, avoids the policy on the ground of fraud, or at least because the insurer has been misled by it. Scotch law. The name of a plea or statement presented to a lord ordinary of the court of sessions, when his judgment is brought under review.

Legal Representation

Licensed attorneys have the authority to represent persons in court proceedings and in other legal matters. When hiring an attorney, a careful consumer considers a number of variables, including the nature and importance of the case, the attorney's fee and payment arrangement, personal chemistry with the attorney, and the attorney's reputation.

Self-Representation

If a case is simple, a person may wish to represent himself, or proceed pro se. The courts usually discourage self-representation because legal practice requires special skills, and an unschooled pro se party is usually at a disadvantage in court. Even attorneys are well advised to hire another attorney for personal legal problems.

Advertising

Many attorneys advertise their services. Attorneys must obey all applicable advertising laws and must follow rules of professional conduct related to advertising. Under these rules they may not make false or misleading claims, create unjustified expectations, or compare the services of another attorney unless the comparison can be factually substantiated. An attorney may not make in-person or live telephone solicitations unless the attorney is related to the person or has a professional relationship with the person. An attorney may not contact an individual after he or she indicates a desire that the solicitations cease, and an attorney may not coerce or harass prospective clients. Aside from these and similar restrictions, attorneys generally are free to use the various media to promote their services.

Duties and Obligations

Legal representation places duties on both the client and the attorney. The client should provide the attorney with all information relevant to the case and keep the attorney apprised of new information. The client should be completely honest about the case with the attorney. The client also should follow the attorney's directives.
The client has an obligation to pay the attorney for the representation. If the client does not make timely payment, the attorney may decline to perform further work for the client. An attorney also may discontinue representation if the client wants the attorney to perform an unethical or illegal act, the client lies and refuses to correct the lie, the client makes representation unreasonably difficult, or the attorney discovers a conflict of interest.
Generally, a conflict of interest is any circumstance that adversely affects a client, or limits the loyalty of the attorney to a client. For example, assume that an attorney regularly represents a corporation. A new client seeks the attorney's representation in a suit against the same corporation. Representing the new client would be a conflict of interest. Generally, the attorney would not be able to take the case or continue representation after the conflict was discovered. However, the attorney may continue representation if he does not believe that the conflict would adversely affect the relationship with the corporation, and if both the corporation and the client agree to the attorney's representation. In practice, continued representation where there is a conflict of interest is rare.
If an attorney must withdraw from representation, he must act to protect the interests of the client. This may involve helping the client find another attorney, postponing court dates, and surrendering papers and documents relevant to the case. The attorney must return to the client any money owed to the client under the fee agreement.
An attorney has many obligations to his or her client. He must zealously defend the interests of the client and respond to the client's concerns. He must communicate with the client, keeping the client informed about the status of the case and explaining developments so that the client can make informed tactical decisions. He must abide by the client's decisions regarding the objectives of the representation. With few exceptions an attorney may not divulge client communications to outside parties without the client's consent.
Attorneys are officers of the court, and as such they must follow the law and obey ethical constraints. They may not harass persons in the course of representation. They may not assist a client who they know will not tell the truth about the case. An attorney should not begin a romantic affair with the client during the course of legal representation. In most states such behavior is an ethical violation. No attorney in any state may perform legal services in exchange for sexual relations.

Fees

Attorneys' fees vary by attorney and by case. An attorney may charge a client in several different ways. The most common forms of billing include flat fees, hourly rates, contingent fees, and retainers.

Hiring an Attorney

The first task in hiring an attorney is to find one who can manage the particular legal problem at issue. All attorneys are not equally skilled in every area of the law. Like many other professionals, attorneys tend to specialize in certain areas of practice such as contracts, Patents, family matters, taxes, personal injuries, criminal matters, and business matters. A person facing criminal charges, for example, will want to contact an attorney who specializes in criminal defense work, not a patent attorney.
Some attorneys are known for their skill in certain types of cases within a specialty. For example, a criminal defense attorney may be competent to handle any criminal case, but may be especially proficient in drunk driving cases or Homicide cases. Attorneys who specialize in certain types of cases often have developed a network of helpful contacts and have a great deal of experience with the kinds of issues involved in these cases.
Some attorneys are general practitioners, proficient in a broad range of legal topics. These attorneys are generally less expensive than specialists. However, if a general practitioner is not competent in a particular area, she may need to put more time and effort into the case than would a specialist, and the client will have to pay for this extra work.
Many businesses specialize in making attorney referrals at no charge to the consumer. They offer lists of attorneys categorized by area of expertise or type of client. For example, some referral services list attorneys who specialize in representing persons of color, women, or gay men and lesbians.
After obtaining a list of qualified attorneys, the consumer should have an initial consultation with several attorneys if possible. Some attorneys offer such a consultation at no cost, whereas others may charge a nominal fee. In either case the initial consultation does not obligate the consumer to hire that attorney or firm.
At the initial consultation, the potential client should provide the attorney with as much information as possible about the case. Relevant information may include pictures, witness statements, and other documents. This information helps the attorney make an informed judgment about the case.
The attorney generally does not give legal advice at the initial consultation. Instead, the attorney will ask questions to determine whether he is able to represent the consumer. The attorney will not begin to work on the case until a fee arrangement has been reached with the consumer.
In deciding whether to retain a particular attorney, the consumer should look at a number of issues. If money is a consideration, the consumer should weigh the attorney's fee against the importance of the case. For example, the consumer may be willing to spend more money on an attorney if facing criminal charges than if involved in a minor civil matter.
If the consumer and the attorney will need to meet frequently during the representation, the consumer should consider the location of the attorney's office and required travel time.
Another consideration is personal chemistry. Attorneys and clients do not have to be friends, but they should have some rapport so that they can work together. If the consumer does not feel comfortable with an attorney, she should find another attorney.
If time is a consideration, the consumer should ask how long the attorney expects the case to last. Some attorneys work more quickly than others.
A consumer should also consider the reputation of the attorney. Attorneys usually are willing to provide a list of previous clients as references. All states have a Professional Responsibility board that oversees the conduct of attorneys in the state. These boards may be able to give consumers information regarding ethical violations by attorneys. The consumer also may want to ask if an attorney has Malpractice insurance, which compensates clients who are victims of incompetent legal work.
A flat fee is a dollar amount agreed to by the attorney and the client before the attorney begins work on the case. The flat fee is favored by many attorneys because it is a simple transaction and because the attorney is paid at the beginning of the representation. The attorney identifies the amount of work that the case will require and calculates a reasonable fee based on the time and effort involved. If the attorney spends less time on the matter than anticipated, the attorney may keep the excess payment, unless the attorney and client agree otherwise. Conversely, the attorney who charges a flat fee may not later demand more money if the case requires more time and effort than originally anticipated.
An hourly rate is a predetermined amount charged for each hour of the attorney's work. The attorney and client may agree that hourly fees are to be paid periodically, or in one lump sum at the end of the case. The time that an attorney charges for legal work is called billable time, or billable hours. Hourly rates vary according to the attorney's expertise and experience. Some critics have argued that hourly rates discourage quick work and expedited resolutions. Before agreeing to an hourly rate, prospective clients should ask for a written estimate of the number of billable hours that the attorney anticipates will be necessary to complete the matter.
A Contingent Fee is a percentage of the amount recovered by the client. A contingent fee is not paid by the client until the client wins money damages from a defendant. Attorneys offer such a fee if the client stands a good chance of winning a sizable cash settlement or judgment. Contingent fees cannot be used in Divorce cases, Child Custody cases, and criminal cases.
Contingent fees are a gamble for the attorney. If the client does not win the case or wins less money than anticipated, the attorney may work for no or little pay. Common contingent fees range from 20 to 40 percent of the client's recovery. For personal injury and Medical Malpractice cases, laws in all states limit the percentage that an attorney may receive from a client's recovery. For other cases the percentage is negotiable between the client and attorney.
A client may retain an attorney for a specific period of time rather than for a specific project. In return for regular payment, the attorney agrees to be on call to handle the day-to-day legal affairs of the client. Most individuals do not have enough legal matters to keep an attorney on retainer.
The term retainer also refers to an initial fee paid by the client. Retainers often are used by attorneys who charge an hourly rate, and some attorneys add an initial retainer to a contingent fee.

Pro Bono Services

The term pro bono means "for the good." In practice Pro Bono describes legal work performed free of charge. Pro bono work is not required of attorneys in most jurisdictions, but courts occasionally appoint attorneys to represent an indigent client free of charge. Under Rule 6.2 of the American Bar Association's Model Rules of Professional Conduct, a lawyer may refuse an appointment, but only if: (1) the appointment would somehow violate another rule of conduct (such as conflicts of interest) or law; (2) the appointment would unreasonably burden the lawyer; or (3) the lawyer finds the appointment so repugnant that he would not be able to effectively represent the client. Attorneys often perform pro bono work in order to contribute to their community and create goodwill for the firm.

Public Legal Services

Legal services organizations exist in all states to provide free or low-cost legal services to qualified persons. Legal services offices are funded by a variety of sources, including private businesses, private individuals, the interests from lawyer trust accounts, and federal, state, and local governments. Civil matters such as bankruptcies, divorces, and landlord-tenant disputes are handled by legal aid agencies. Criminal matters are handled by state public defenders.

Private Legal Services

Some organizations sell "legal insurance" for a fee. Legal insurance is a form of prepaid legal service in which the consumer pays a premium to cover future legal needs. Such a service may be offered through labor unions, employers, or other private businesses. Most legal insurance policies do not cover all types of legal matters, and the policyholder may not be entitled to choose his lawyer. The consumer should determine the scope and nature of the legal representation offered in legal insurance packages.

Other Considerations

If a client does not believe he or she has received competent legal representation, the client has several options. In a criminal case, if a convicted defendant believes he received incompetent representation, the defendant can address the issue on appeal, and the appellate court may reverse the verdict. If a client believes that an attorney has committed misconduct, the client may contact the board of Professional Responsibility in the state in which the attorney practices. If an attorney is found to have violated the law or the applicable professional conduct code, the attorney is subject to discipline by the board. Discipline can range from a reprimand to revocation of the attorney's license.
In some states if an attorney and client have a dispute over fees, the attorney may place a lien on the client's money or Personal Property. There are two types of attorney liens: a retaining lien and a charging lien. A retaining lien gives the attorney the right to retain money or property belonging to the client until the client pays the bill. The attorney does not have to go to court to do this, but the judge may order a hearing at the request of the client to determine whether the attorney has good reason to keep the money or property.
A charging lien gives an attorney the right to be paid from the proceeds of a lawsuit. For example, if an attorney charges a client a contingency fee and the attorney wins a large monetary award for the client, the attorney is entitled to a predetermined share of the award. Generally, the attorney may keep a certain amount for services rendered even if he was fired by the client. However, if a court finds that the client properly fired the attorney for misconduct, the attorney may not be entitled to any portion of the client's award.

Further readings

American Research Corporation. 1994. "How to Hire an Attorney." In Consumer Guidebook: Law and Leading Attorneys. Minnesota edition Minneapolis: American Research Corporation.
Editors of Court TV and The American Lawyer. 1995. The Court TV Cradle-to-Grave Legal Survival Guide. 1st ed. Boston: Little, Brown.
Latto, Lawrence J. 1998. "The Restatement of the Law Governing Lawyers: A View from the Trenches." Hofstra Law Review 26.
McKay, John. 2000. "Federally Funded Legal Services: a New Vision of Equal Justice Under Law." Tennessee Law Review 68 (fall): 101–18.
Morgan, Thomas D., and Ronald D. Rotunda. 1993. 1993 Selected Standards on Professional Responsibility. Westbury, N.Y.: Foundation Press.
Peters, Jean Koh. 2001. Representing Children in Child Protective Proceedings: Ethical and Practical Dimensions. 2d ed. Newark, N.J.: LexisNexis
Rotunda, Ronald D. 2002. Professional Responsibility. 6th ed. St. Paul, Minn.: West.
Watson, Sidney D., ed. 2001. Representing the Poor and Homeless: Innovations in Advocacy. Washington, D.C.: American Bar Association, Commission on Homelessness & Poverty.

legal representation definition

REPRESENTATION, insurances. A representation is a collateral statement, either by writing not inserted in the policy, or by parol, of such facts or circumstances relative to the proposed adventure, as are necessary to be communicated to the underwriters, to enable them to form a just estimate of the risk.
     2. A representation, like a warranty, may be either affirmative, as where the insured avers the existence of some fact or circumstance which may affect the risk; or promissory, as where he engages the performance of, something executory.
     3. There is a material difference between a representation and a warranty.
     4. A warranty, being a condition upon which the contract is to take effect, is always a part of the written policy, and must appear on the face of it. Marsh. Ins. c. 9, Sec. 2. Whereas a representation is only a matter of collateral information or intelligence on the subject of the voyage insured, and makes no part of the policy. A warranty being in the nature of a condition precedent, must be strictly and literally complied with; but it is sufficient if the representation be true in substance, whether a warranty be material to the risk or not, the insured stakes his claim of indemnity upon the precise truth of it, if it be affirmative, or upon the exact performance of it, if executory; but it is sufficient if a representation be made without fraud, and be not false in any material point, or if it be substantially, though not literally, fulfilled. A false warranty avoids the policy, as being a breach of the condition upon which the contract is to take effect; and the insurer is not liable for any loss though it do not happen in consequence of the breach of the warranty; a false representation is no breach of the contract, but if material, avoids the policy on the ground of fraud, or at least because the insurer has been misled by it. Marsh. Insur. B. 1, c. 10, s. 1; Dougl. R. 247: 4 Bro. P. C. 482.
     See 2 Caines' R. 155; 1 Johns. Cas. 408; 2 Caines' Cas. 173, n.; 3 Johns. Cas. 47; 1 Caines' Rep. 288; 2 Caines' R. 22; Id. 329; Sugd. Vend. 6; Bouv. Inst. Index, h.t. and Concealment; Misrepresentation.
REPRESENTATION, Scotch law. The name of a plea or statement presented to a lord ordinary of the court of sessions, when his judgment is brought under review.