You have contacted an attorney for help with a complex legal matter—maybe a business dispute, a high-net-worth divorce, or a probate issue. But as the conversation turns to billing, you are caught off guard when they mention they charge by the hour. Sure, you are no expert in how lawyers bill, but you would assume flat-rate billing might at least be an option for your case.
We cannot blame you for being drawn to flat-rate billing. After all, finding qualified legal representation can become a significant investment, and this pricing method seems like a straightforward and highly predictable solution—especially for budget-conscious clients who prefer clarity about costs upfront. That said, you are better off choosing the lawyer who charges by the hour. This does not suggest that flat-rate billing is never appropriate in the legal world. Instead, the complexity and variability of certain legal matters may make hourly billing more suitable to ensure your legal matter is afforded the time and attention required to achieve your goals and that the interests of the client and the attorney remain aligned.
Follow along with us as we discuss this important legal pricing topic in today’s blog post.
(Editor’s Note: This is the second in a short series of blog posts on legal pricing. We aim to educate individuals, families, and business owners about attorney pricing, why attorneys and firms charge how they do, and how it benefits the client).
There Is a Time and Place for Flat-Rate Billing
In the first installment of this blog series, we pointed out that attorneys generally choose from four different billing methods (hourly, contingency, modified contingency, and flat-rate billing) depending on the case and their preferred model. With flat-rate billing, the attorney you hire agrees to do X for a specific amount of money. While this sounds attractive for many would-be clients on a budget, it is typically only made available for straightforward legal tasks where the attorney can predict within a reasonable degree of certainty the number of hours it will take to handle the legal matter.
Flat-rate billing works well for tasks like drafting a Will, Trust, prenuptial agreement, or reviewing contracts. It is unsuited for more complex legal matters such as divorce, civil litigation, child custody disputes, or other areas where the amount of work is impossible to predict with any level of certainty.
Here are a few reasons why:
- Complexity and unpredictability—There are so many variables associated with divorce, civil litigation, and business transaction cases that it is impossible to estimate or determine how much time will be required to complete the case. Examples of such variables include but are not limited to, the level of cooperation between attorneys in exchanging necessary information, judge and court availability (cases get continued by the Court, or your hearing does not go forward on your set hearing date all the time), whether mediation is required, the amount of back in forth between lawyers or between you and your lawyer, the amount of information you have in your possession and the amount of time it takes to obtain the information you need, and the reasonableness, or lack thereof, of the parties’ positions.
- Lack of flexibility — Flat-rate billing often puts attorneys in situations where they cannot adapt to evolving circumstances. As a result, they may lean toward cookie-cutter solutions and form-based practices to minimize how much time (work on your case or preparation for hearings/trials) they must do. These practices may not address your unique circumstances or needs, especially if kids and assets are involved.
- Risk of overcharging or undercharging — To account for potential complications and evolving circumstances, an attorney who uses flat-rate billing may overcharge the client. Conversely, they could undercharge, risk not being compensated for their work, and, therefore, not be motivated to finish your case in a timely manner.
We caution you against working with any attorney who offers flat-rate billing for divorces, civil litigation cases, and other complex legal matters. We have found over the years that in these situations, the attorney is living flat fee to flat fee and may not give your case the attention it deserves once that flat rate has been earned. In other words, they have no incentive to work on your file because they are not paid for their time, experience, and knowledge of the subject matter.
A client came to us a few years ago after firing her previous lawyer. She had paid him a flat fee of $5,000 to handle her contested child custody case but could not get him to show up or call her back after the initial hearing. We were transparent with our hourly billing practices, and she ultimately hired us to finish her case, which required multiple court appearances. Most experienced and client-focused attorneys charge hourly for their legal services. While this pricing structure may seem overwhelming, it ensures quality representation without the attorney worrying about time limitations or the client worrying about their case not being provided the time and attention it deserves.
Please continue following along as we dive into legal pricing in future blogs.
Call Nelson Law Group Today!!
If divorce is the answer, you need an advisor to guide you through each stage and help you deal with the fears that naturally come with that. We work diligently to achieve a result that ensures you receive what you are entitled to as you move forward onto the next stage of your life. The Nelson Law Group brings nearly two decades of family law experience to every case.
Give our knowledgeable staff at Nelson Law Group, PC, a call if you have any further questions. Our staff is always available. Give us a call today! For more information about Brett A. Nelson, click here.
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Source: Nelson Law Group