Alternative billing arrangements

According to Larry Primeaux, the construction of legal fees is undergoing a metamorphosis in reaction to changing economics. Fact is, indeed, that you read everywhere that law firms (lawyers, advocates, attorneys) have to change. The system of “hourly rate billing” in particular has to take the rap. “In this economy, at least for the short term, it appears that law firms will be forced to agree to alternative fee arrangements if clients demand those arrangements.” (2013 ABA Publication).

According to the website AMPulse, “the success of flat rate fees is dependent on a number of factors including:

  • The client. Carefully screening each client can provide one with the feel for the individual. Demanding clients may not be good candidates for fixed retainers.
  • A complete understanding of the legal issues that underline the retainer and the services the client will require before quoting a retainer. In cases in which this is not possible, a fixed retainer is not advised. Certain types of lawyers will have a much more difficult time with flat rate fees.
  • Being open and honest with your client on all matters related to the retainer and any additional fees that the client may be subject to. It is advised attorneys who choose to provide clients with flat rate fees draft a retainer agreement that details the scope of the retainer in regards to services to be provided and timelines for the completion of services.

Whatever fee arrangements a lawyer may offer, fact is that clients want to get the most for the money they will have to pay: value for money. Therefore, it is important that on commencement of a case the lawyer and his client must make clear arrangements about what they can expect from each other.

Click here and here for previous postings on the subject.

Karel Frielink
Attorney (Lawyer) / Partner

(15 January 2014)

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