Wednesday, January 2, 2008

Flat fees

Are clients ready for flat fees?

For a long time lawyers debated about the merits between flat fee and hourly billing. My practice has been a mixed structure of hourly, flat, and contingency fees. Then Scott Turow published The Billable Hour Must Die in the American Bar Association Magazine. Things blew up. Here are two examples:

The Billable Hour "Cockroach" is Being Exterminated....One Law Firm At a Time
....And as more and more law firms, big and small, say 'adios,' eventually the tide will shift, the consumer will become more educated as to the benefits of not paying a lawyer by the hour and client/attorney relationships will improve, lawyer career satisfaction will improve and maybe, just maybe, the image of the profession will improve in a noticeable way.

Legal Ease Blog:

"Among those talking about the article and the Shepherd Law Group are: Ron Baker of VeraSage Institute and Andrew Perlman of Legal Ethics Forum (whose post contains some interesting observations about some hourly billing practices). Carolyn Elefant posts her insights on's Legal Blog Watch and continues the conversation by asking why lawyers and not clients, are (and some argue that they must) be the ones leading the charge away from the billable hour. And my friend Susan Cartier Liebel of Build a Solo Practice, LLC is also writing about it. She says, '[the billable hour is] a profession-created cockroach and as such it can be exterminated, one lawyer, one law firm, one educated client at a time.'"
Other than custody cases, divorce cases involving custody and contested guardianship cases, my family law practice has been on a flat fee basis. I started reconsidering shifting solely to a flat fee basis since the Turow article.

Many of my fellow family law bloggers either billed on a flat fee basis before Turow's article or switched after: No More Hourly Billing For Me; Clients Benefit From Fixed Fees in Family Law Cases; and Clients Benefit From Fixed Fees in Family Law Cases.

The South Carolina Family Law Blog carried on the longest discussion ( More Discussion of Fixed Fees in Family Law Cases, Attorneys Also Benefit From Handling Family Law Cases on a Fixed Fee Basis, and Clients Benefit From Fixed Fees in Family Law Cases) on the topic as it concerns family law. Which is probably a good thing. I suggest Clients Benefit From Fixed Fees in Family Law Cases especially for laypersons. In other areas of law, the flat fee concept seems more warmly received (such as business cases; see Firms Learn to Cope With Alternative Billing Plans).

Not that all writers favor flat fees or find them without their own faults. f/f/a... published finally: NLJ on the realities of alternative billing and yourself, your clients and your ethics. New York Divorce Report notes some problems with flat fees in Attorneys' Fees-Flat Fees or the Billable Hour- Which is Better?.

If the reactions I have gotten lately are any indication, clients need educating about the different fees. I have a very long post written about changing to an almost flat fee structure for my family law cases but this article shows the context from which I came to my decision.

1/26/08 Update: I sketch how I want to apply this to my practice in Where I Want to go with Flat Fees.

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