In my previous post, I discussed the problem some people have when they don't use their attorney. As I said, many individuals and companies have an established relationship with an attorney. Heck, I'm sure if you stood downtown, blind folded yourself, spun in a circle 5 times, and threw a rock, you'd probably hit an attorney. Most likely, it'd be the person "supervising" your negligent behavior, or the individual chasing toward you while your arm is raised.
The simple truth is, you have an attorney, you like (or maybe you don't) your attorney, but you're afraid to use him/her because of the costs involved.
Our firm, Absolute Legal Services, LLC, implements a "value pricing policy." Our goal is to get away from the traditional lawyer rhetoric of the "billable hour," and provide our clients with more stable and economical ways to pay an attorney. Part of the ideal of value pricing is finding the reasonable balance for compensating attorneys for their time, and for the job they're performing.
Traditionally, there are 3 general types of ways to pay an attorney. The most common, and by far most variable and unpredictable, is the hourly rate. With this method, you pay an attorney by the hour for legal fees, ofter forking over large amounts of money just to "retain" his/her services. It's this type of billing that causes people to shudder when they think of using an attorney. This is most fair for the attorney, but least fair for the client because unlike every other product or service, there's not cost controls for the client. The attorney (or in most cases, multiple attorneys) "works" the case (or client) to death. In some cases, this could be like the obligatory "bad government worker" scenario, who's just collecting an hourly pay. I hate hearing "I bill by the hour," because this makes me shudder. We try to avoid this type of billing at all costs (unless of course it works to your advantage).
The second most common type of fee structure is the contingency fee. We offer this type of fee agreement to our personal injury (auto accident, social security, workers' compensation, etc.) clients. The value in these types of cases is that our firm handles the up-front costs of the litigation (saving the client money), and we defer our fee until the end of the case. Our belief is that this fee rewards the client and the attorney for their actions. Clients pay the attorney for his/her time, knowledge, skill, etc., while the client gains the legal assistance he/she needs to receive compensation and justice. This billing method is one of my favorite billing methods.
The final common type of fee structure is the flat fee. The flat fee contemplates that you'll pay all money up front (or in installment payments) for the attorney fee, if the attorney will guarantee that you'll never have to pay more money along the way (except for costs like filing fees, experts and depositions). These flat fees can range from as little as $300.00 for simple services, to $10,000.00-plus for more complex matters. My clients overwhelmingly prefer this pricing method, because the clients know exactly (aside from the other excluded fixed costs) how much they'll pay for my lawyer fees and services. There's no surprises at the first of each month when the hourly bill arrives.
The flat fee also allows both parties to fairly assume risks associated with legal services. Our firm assumes the risk that we may spend more hours on the the project than anticipated, thus reducing the potential profit. Our clients assume the risk that we'll spend less hours on the project. However, our flat fee option closely mirrors other common business practices – fixed prices for goods and other services. You buy a new flat screen TV, there's always the risk that you're paying too much. Then again, if you can negotiate a lower price, there's always the risk that the business loses. Quite simply, we're all willing to gamble.
Value pricing is about giving our clients quality services for prices that fairly match risk, time, skill, and knowledge, among other qualities. Value pricing gives our clients an opportunity to take afford legal services, they wouldn't have otherwise.
Our outsourced house counsel services offer our business clients an opportunity to hire an attorney, without all of the other costs involved. The businesses can pay monthly or yearly for on-call legal services.
We hope you'll utilize our firm when you're making your next choice for an attorney, but if you don't, we hope you'll use a firm that places a priority on the value of their services rather than the bottom dollar. If they're not offering anything better than a billable hour, ask them why not.