Why is that? Kerry Boyle, a partner with the Columbus law firm of Isaac Wiles, thinks he knows. “Clients have a right to know what their legal fees will cost them,” he says.
In Boyle’s real estate practice, he offers some clients hourly billing and others, alternative suggestions. It all depends on the client and their legal needs.
Many clients, such as young, start-up entrepreneurs, may never have used legal services before and have no idea how much they cost. Still, says Boyle, they are often reticent to ask about fees, “but they should.” He also says lawyers should be more upfront about fees and costs, especially with new clients.
For Rob D. Dills, an associate with the South Carolina office of Dean B. Bell, LLC, alternative fee options are a way of life. “We utilize a mix of hourly billing, contingency rates, flat fees, and subscriptions/recurring packages. For our litigation matters, the majority is billed hourly or contingency (the rare PI cases). Real estate transactions are billed by flat fees. Estate Planning services are a mix. We charge flat fees for preparing the estate docs (wills, living wills, POAs, trusts, etc.). We offer flat fees for each, as well as larger packages that offer a discounted rate,” Dills says.
In addition, the firm recently began an annual review plan for its estate clients, who are then charged a low annual fee.
Dills says his firm has always offered flat fees for its real estate and estate planning services. However, in order not to stay stagnant, Dills revamped some of the firm’s offerings in those practice areas. The annual review of a client’s estate plan is one such change.
He says he wanted to implement new services payable by an alternative payment option in order to “provide additional benefits to our estate planning clients beyond simply preparing the papers.”
He notes that in light of technology, people can get a will template online for $5, which sometimes causes them to dismiss the need for a lawyer. “We explain to potential clients that by using an attorney to prepare their estate plans, they will have them directly customized for their needs and we will review their assets and circumstances to explain their options and why or why not they should use certain docs. With the annual plan we offer, we provide ongoing review and assistance, and also a discount to their family on probate proceedings,” Dills says.
Another reason for offering alternative fees is to “reduce uncertainty in billing,” he says. When a client is billed hourly, they have little certainty as to what their monthly costs will be. However, if the firm can successfully sign clients up for recurring monthly charges in even amounts every month or year, “then at least there will be a guaranteed baseline for us to work with,” Dills says.
Dills adds that his clients seem to embrace the flexibility in billing the firm offers them. He reports “positive feedback” on the annual review plan, noting clients seem to understand the benefits of the yearly review. Conversely, since the firm only recently began offering similar plans for businesses, it hasn’t collected enough data to determine its impact yet.
James R. Carpenter, a solo practitioner in Harrisburg, Pennsylvania who handles family law matters, likes to charge flat fees, but in phases. Charging people that way means “the client won’t have to worry about additional fees,” he says.
He says efficiency is the key to running a law firm using a flat fee billing system. Moreover, “you have to be accurate in predicting how much time you will invest” in a case so you don’t consistently lose money while providing excellent legal counsel.
One problem for law firms that toil a flat fee-only regime is ensuring enough money comes in every month, cautions Carpenter. If your business model calls for a larger initial payment and a lower monthly payment from established clients, you need to attract new business every month to ensure your bills can be paid, he says.
Tami Kamin Meyer is an Ohio attorney and writer.