Attorneys have various methods of structuring their fees, but as George says hourly rates can be expensive. In this area the hourly rate could run anywhere between $175.00 to $300.00 per hour depending upon the experience of the attorney in a particular field of litigation. The larger law firms may charge more. Even if the case goes to litigation the court generally encourages the parties to settle the case before it goes to trial.
Unfortunately, many times the litigants don't settle until the eve of trial, and by that time significant legal fees have been incurred. In my collections work I run into this many times. The defendant figures why pay now when he can pay later without stopping to think that it is less expensive to settle early in the litigation.

There are several things to consider. First, you should notify your e&o insurance carrier as soon as a claim is asserted against you. I have seen insurance companies deny claims because the insured failed to give the insurer prompt notice of the claim. Second, your insurance policy will probably require that you are to be represented by the law firm of the insurer's choice. If not, you will need to hire an attorney to represent you. Third, read your e&o policy carefully. Many of these policies provide for the attorneys fees to be paid from the proceeds of your policy...thus reducing the funds available to pay your claim the longer the litigation goes on. You would be personally liable to the extent that the judgment exceeds the limits of your insurance coverage and the funds available to pay the judgment.