Thank you-

I am not saying that it does not suit certain practice areas. It does. And, it suits some practices areas very well.

Contrary to what is presented, I tend to think most lawyers bill on some sort of flat-fee basis. I tend to think we are often not self-aware enough to understand that what is being hawked as alternative billing or fixed fees is nothing new or widely employed. It has been in most types of consumer work, anyway, since before I started practicing law in 1986.

For me, however, I engage in what is increasingly complicated, single-shot litigation. It is just as likely that we incur $2,000.00 in attorneys’ fees and costs as $20,000.00. It is impossible to predict until you know or understand the position of the parties and the lawyer on the other side. For example, I filed two similar cases a few months ago, in the same Court, against different defendants. One settled almost immediately, and we were paid $2,500.00 in attorneys fees and costs. In the other the Defendant did not file an answer. It filed an extensive Motion to Dismiss based upon some tricky jurisdictional issues. We responded to that brief. Then it filed a reply brief, which the Court determined was in fact an amended brief that had little connection to the first. We were instructed again to respond to those issues. We had 4 separate hearings and 50 pages of brief on our side before we got to the answer stage.

Now, one could say to employ some sort of unit billing, which is contracted beforehand. But, it is hard to see how that is equitable to either me or the client. We would be trying to create a one-size-fits-all billing system to what is a volatile situation. The client on the case that turned out to be easier would ultimately get charged for the fees or costs of the client’s case that was harder and much more expensive.

More likely, the lawyer has to not accept volatile cases in which people need help, or bare all of the risk of this happening. I think this is what happens in many litigation cases based-upon a fixed fee. The lawyer tends to look for ways to throw the client under the bus when the case blows up into something not predicted. It happens every day. I know. Many of these clients call me. They are in court complaining to the judge when I am waiting on my case to be called. They call the Bar. Why? The lawyers will go broke based upon what he or she has collected based upon the amount of work to be expended.

I tend to think that fixed fees (if not the charging of them then the setting of them without much empirical evidence such as the time spend on a typical case) is one of the main reasons that many lawyers are unprofitable, or are struggling financially, in their work. I get calls from these lawyers often. There solution in the past has been to try and increase their caseload. But, ultimately, it is like a restaurant trying to make a profit selling prepared food for less than its costs of preparation. You can increase volume, but it will only increase losses.

The culprit is the amount of money collected by the attorney for the actual work done by the attorney. To the extent that an occasional attorney is making a lot of money on fixed fees, at least in a litigation standpoint, is because the attorney has found a way to disguise the actual value of the work being performed in the typical case from the amount of money collected.

So, my first point is to be self-aware. Fixed fees are already the norm in the greater number of practice areas. They have been for a long time. You can walk into Mexican restaurant in this day and age and then proclaim that you have discovered the taco, and then start evangelizing the taco as the new wonder food. However, that is not true.

And then, my point is that even if you engage in fix-fee or alternative billing methods, you have to properly gauge those fees to make sure they work. You do that by maintaining time records of what you do and compare those to what you charge in a typical case.

Florida Rule of Professional Conduct 4-1.5 lists the following factors to be considered for determining whether your fee is reasonable, and I factor in all of them:

(A) the time and labor required, the novelty, complexity, and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(B) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;

(C) the fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature;

(D) the significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation, and the results obtained;

(E) the time limitations imposed by the client or by the circumstances and, as between attorney and client, any additional or special time demands or requests of the attorney by the client;

(F) the nature and length of the professional relationship with the client;

(G) the experience, reputation, diligence, and ability of the lawyer or lawyers performing the service and the skill, expertise, or efficiency of effort reflected in the actual providing of such services; and

(H) whether the fee is fixed or contingent, and, if fixed as to amount or rate, then whether the client’s ability to pay rested to any significant degree on the outcome of the representation.

I also consider the client’s needs, such as the need to do something in a rush, or the need to handle a project over time in order to make it affordable.

So no, no one pays me $15,000 to send a demand letter. But when I look at all the tasks associated with a litigation and add up my separate fees for each task, I know that “the fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature” is in the $15,000 ball park. But that’s just one consideration in determining whether the fee charged in reasonable.

I’m also not suggesting that flat fee billing is a moral imperative. I am saying that an arms’ length negotiation where the client knows what to expect is a better way to go about things.

None of what I have said is intended to be an ad hominem. I’m not arguing that lawyers bill by the hour because they are unethical. Quite the opposite – genuinely ethical lawyers bill by the hour without questioning their practices. That blind faith is a serious problem with the way most law firms handle hourly billing.

And I am definitely saying that, for ME, fixed fee billing works much better. My column is, by and large, me discussing my experiences and my choices. As always, your mileage may vary.