Litigators are the attorneys who seem to be most set against billing on any arrangement other than hourly billing or contingent fees. But alternative, ‘flat’ or ‘value’ billing can be done for litigation, too. In those cases, the fees could be established in phases, or conditioned on specific events.
You've got to give clients an idea of what it will cost if there are unforeseen circumstances - and define what those ‘unforeseen circumstances’ might include.
For example, although I’ve never practiced matrimonial law, I’ve been told by a number of matrimonial lawyers that clients will often come in requesting an ‘uncontested’ divorce. But as the lawyer begins to get involved in the case, it appears that the only thing that is truly uncontested is that the parties no longer wish to remain married – everything else, from custody to finances, to marital assets, pensions, property, and even who gets what CDs is hotly contested.
Under those circumstances, the smart matrimonial lawyer would have an in-depth conversation with every potential client specifying what actually constitutes an uncontested divorce, and quoting a fee. The lawyer should then also discuss some of the other issues that are likely to arise and clearly advise the client that any such issues that arise will increase the fee. The fee agreement should specify exactly what is included in the fee and should state clearly that any additional actions to be taken by the lawyer outside of what is specified in the agreement will require an additional fee.
Many matrimonial lawyers tell me that the cost of a divorce is often determined by what the parties do, rather than what their lawyers do, and tell them that even if they are ‘reasonable, if their spouse wishes to contest things, the cost will be higher. Lay out for them what circumstances would require a higher fee - i.e. protracted litigation, many court appearances, motions, etc.
There are ways to do litigation on a flat fee basis, or modified flat fee basis, if you set expectations properly with the client up front. The flat fee includes x,y and z, but anything additional or not anticipated by the original agreement is extra, and subject to a change order and an additional fee. Essentially, what you're doing is defining the scope of the engagement changes, the fee must also change.
For example, you could offer a flat fee for litigation that includes a certain number of court conferences, a certain number of depositions, and ‘basic’ discovery demands and responses, but specify in your agreement that anything above and beyond that is additional. Setting fees like this is a skill and it needs to be developed over time, and you will probably need to test and go through some trial and error before you get there, but I think it’s worth pursuing.
You may be surprised at how quickly clients embrace a value pricing model. As discussed in some of my other posts, clients that have any experience with lawyers are generally put off by the idea of hourly billing and the inherent conflicts it creates. Offering them a different billing arrangement in which they find out the fee before the work is done, rather than after, can have a surprising effect on the attorney client relationship.
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