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Flat Fees Are Finally Here!

Flat-Fee-300x280Billable Hours
Lawyers are taught at the outset of our careers that the Billable Hour rules the world.  Coming from the business community, I always found the billing practices of law firms to be rather odd.  In most other service industries, the customer obtains a quote or bid or scope of work that outlines what you will pay for the work you want done.  Law firms (as well as accounting, and some other professions), on the other hand, almost always operate on an open-ended contract that often brings a frightful surprise to clients at the end of the month.  A common analogy is taking your car to the garage for repair and the mechanic informs you that he might be able to fix your car, but he’s not sure how long it will take and can only tell you what it will cost when he’s finished fixing it.  Another good comparison is hiring someone to paint your house by the hour.  Either way, an open-ended hourly system of billing invites inefficiencies and does not serve our clients as well as we should.

Variable Costs of Litigation
Legal fees can vary greatly from firm to firm and can increase exponentially with even a little bit of conflict between the parties.  It’s been very difficult for the Family Law bar to adopt flat fees because of the moving target of litigation.  For example, given two cases that have almost identical fact patterns, assets, and liabilities, Case A’s litigated divorce will cost around $30,000 each and Case B”s litigated divorce will cost in excess of $150,000 each.   And it’s hard to know, in advance, which case an attorney might be dealing with because most of the factors are out of the attorney’s hands.  (Yet another reason to avoid litigation!)    The same is also true, to a lesser degree, for negotiation.  For those services, we have retained the status quo billable hour.

Flat Fees
One of the positive changes to come out of the economic downturn of 2008 (and beyond) has been a “call to arms” by some of the most influential law firms in the country to move our profession to flat fees.  I have been on this bandwagon for a couple of years because it makes good financial sense and, for alternative dispute resolution cases (arbitration, mediation and Collaborative Divorce), the costs are generally predictable.  When I first started talking about flat fees, our clients did not seem ready to embrace such a drastic change to the norm, but that’s all different now.  In response to a recent flurry of requests, we have established a new and improved fee schedule that includes flat fees for most of our services.

  • Arbitration:  Flat fee.
  • Mediation:  Flat fee.
  • Collaborative Divorce:  Choose flat fee or billable hour.
  • Negotiated Settlements:  Billable hour.
  • Litigation*:  Billable hour with a 15% litigation surcharge.
  • Unbundled Services**:  Flat fee.
  • Consulting:  Billable hour.

*Litigation:  We only accept a very limited number of cases each year, with preference to former clients.

**Unbundled Services:  In response to requests from people like you, we have created a menu of limited service packages — so-called “unbundled services” — including a Petition Package, Response Package, Consent Decree Package, and Power of Attorney Package.

Our fees are not posted online because there are so many variables to consider and we want to make sure that each client is selecting the most suitable service for their unique situation.  Please call our office for more information about our services and fee options.

Choose Flat Fees ~ they are more cost effective!

3 Comments

  1. Like the flat fee concept and your article describes concept well. It makes sense, thank you Pamela!

    Best, Brigitte

    Reply
  2. Hello: I have been thinking of doing flat fees for a while. Can I contact you for some direction. Thanks. Mike

    Reply
  3. Brigitte — Thanks for your comments. As you know, budgeting during a divorce is a necessary but difficult issue and it can be very helpful to the process if both parties know up front what the legal fees will be so that they can plan accordingly.

    Mike — I’m no expert, but I’ve learned from those who are. I highly recommend doing some research in your practice area and finding a mentor. For me, Mark Chinn has been a very valuable resource. His web page is here: http://www.chinnandassociates.com/index.html

    Reply

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