MCA Attorney Fees: 5 Billing Structures to Compare Before Signing

How Much They Cost

If you are thinking of hiring an MCA attorney, the big question is going to be how much they cost. The answer is that they charge in one of five ways: on a flat fee basis, for an hourly rate, in a contingency based on what they save you, in a percentage of the total debt, and in a hybrid of two or more of these. The cheapest one for you is going to depend on what you need and how far along your case has progressed.

It also depends a lot on when you hire and where, and the number of funders and how aggressive their practices are. If you wait until after the lawsuit, you need a lot more from them. More debts mean more funders to address and more positions you have to deal with. Some funders are harder to deal with than others.

Once the MCA debt has gone to court, your attorney must file answers, make responses and deal with the discovery process, motions, and perhaps make court appearances, each of which takes time and increases your cost. MCA defense lawyers familiar with how to deal with MCA debt better may charge more, though can sometimes resolve the matter faster and in better settlements.

Flat or Hourly

A flat fee is where you pay one set price for a defined job. The trick to that is knowing how to define the job. Many lawyers charge it for handling an MCA position through to settlement, or defending a lawsuit through its early stages. For a single position settled before a lawsuit, that might be about $2,500 to $7,500, and for one in court it might run from $5,000 to $15,000. You know exactly how much you will pay at the beginning, before the work is even started. And it gives your lawyer reason to be efficient.

Flat fees have some downsides. If the work goes quick, you might feel you have paid too much. The ABA ethics committee in 2023 released an opinion on flat fees. It said the money has to go into a client trust account, and your lawyer can take it out only as it is earned. A “nonrefundable” label on a fee does not mean you don’t get back unearned money if you cancel.

In an hourly rate, you pay only for the actual time your lawyer or her assistants work on your case. The working time is tracked by tenths of an hour and put into a detailed invoice. Quick cases can end up costing less than a flat fee. The biggest drawback is unpredictability. A full-on contested lawsuit with discovery and motions in court can easily pass $20,000 to $30,000. You will have no idea at the outset how much to expect for that one.

In one ABA example, the firm asked for and got a $6,000 advance from the client. The firm’s rate was $300 an hour. The lawyer spent five and a half hours on the case, filed a document for the client, for which there was a $150 fee. He was entitled to 5.5 x $300 + $150 = $1,800 and the client was entitled to $4,200 back.

MCA lawyers also work on contingency. That means their fee is some percentage of what they save you. Imagine you have a $100,000 debt, and the lawyer gets you a settlement at $60,000. They saved you $40,000 and might take a share of that as their fee. If the lawyer cannot manage to save you anything, they will not charge a fee. There is often little upfront cost to a contingency. A typical MCA contingency is 25% to 40%. So a 30% fee on a $50,000 reduction would be $15,000. Big reductions from an aggressive lawyer can cost you more than flat or hourly in the end.

In states such as Indiana, a contingency fee agreement must be in writing and signed by you. It needs to say the percentages for each stage, settlement, trial, appeal, and whether expenses come out before or after the fee. At the end, the lawyer gives you a written statement of the outcome.

Some MCA firms charge a share of everything you owe, often 5% to 10%, instead of what they save you. Sometimes a firm charges a reduced flat fee for early work and then a reduced hourly rate or contingency fee later if there’s a lawsuit or lots of negotiation. This hybrid helps you keep cash upfront.

Fees and Expenses

Your legal help is seldom all you pay. There are court filing fees of a couple hundred to over a thousand dollars, and you may need a process server, a court reporter and a forensic accountant. The lawyer should explain what expenses you could be looking at.

Before you hire an MCA attorney, the ethics rules of most states require the lawyer to tell you their scope of work and their basis or rate of fees and expenses, preferably in writing and at or soon after the start of the case. You should talk about which of these models the lawyer prefers and why they fit your case’s stage. Ask about all fees and costs and what they cover. Beware anyone who is vague about the fees or guarantees success. The cheapest one available is not always the best choice for you.

For you, an MCA lawyer with a $10,000 flat fee could look expensive. But set it against what it might save you. A $150,000 debt settled at $70,000 with that lawyer means you come out $70,000 ahead. The lawyer can often save more than the fee.