The South Carolina Family Law Blog has a post about fix fees in family law cases. In the post, Ben Stevens explains why attorneys benefit from such a fee arrangement.
Attorneys benefit in the following ways from handling family law cases on a fixed fee basis:
- No longer having to track every minute of every day will mean that the attorney is no longer a slave to the billable hour.’ For most attorneys, tracking time is a stressful, cumbersome, and tedious process.’ It is inconvenient and counterproductive to have to continuously stop working on clients’ cases to record what time was spent on each one, and then to track and review the recorded time at the end of each day or week.
- The attorney will gain several extra hours per week that used to be spent recording time, and this newly found time can be spent working on clients’ files, spending time with family, or relaxing – all of which are better than chasing the tail of the billable hour.
- Even more time will be saved by not having to send out as many bills per month, record and process the payments, and deal with the trust accounting issues that are involved with retainers.
- There should be no disputes with clients over the amount of a bill and/or no questions to be answered about the amount of time that was spent on a given activity, because the amount charged for the services was negotiated and agreed upon before the representation began.
- Handling cases in this manner gives the attorney the ability to decide up front if he/she wishes to represent someone for a reduced fee, such as military personnel, teachers, or other public servants.
- There are other benefits to the attorney, such as the additional leverage gained when establishing fees in this manner and the ability to deposit these fees directly into the attorney’s operating account if the fee agreement is drafted properly.
Source for Post: South Carolina Family Law Blog.
I personally think these reasons or solutions are contrived not because fixed fees are best in family law situations, but because the attorney has already made (what is often times a bad decision) to charge a fix fee.
Attorney should not be saving time by not tracking time (at least on a broad basis). If the attorney does not track time, the attorney does not either know or understand whether the fixed fee being charged is sufficient for future reference. Are you earning up to your potential? You, the attorney, need to know.
If someone has established an integrated time keeping system, especially since they can now input time on their own notebook computer when it occurs, and the attorney trains himself or herself to do it, it does not take several hours a week to record time. Time keeping is more than a device for getting paid. It is also a management tool. Who says that family lawyers and home office attorneys do not need management tools as well? A restaurant, for example, would not stay in business if it did not know the typical cost of putting together a plate lunch. Yet, attorneys think for some reason that they can do so.
Just because the attorney charges hourly does not mean they have to send out bills every month or spend time on trust account maintenance. The attorney can still estimate the time needed, obtain a retainer for that amount and, if the contract is properly drafted and disclosed, place that money directly in his or her operating account.
It is just silly to state that there will not be arguments over the bill if there is a fixed fee. The argument is always whether the fee was earned. The argument never much arises over the amount or how paid (those are retaining issues), but whether the attorney is perceived as having performed a good job. If not, or if there are loose matters that need to be tended to, the client will always believe he or she was overcharged, fixed fee or not. State bar grievances over fees are always associated with the quality of work as perceived by the client.
The downside to this argument of no arguments is that the client has no incentive to save the attorney time or money because the client has no downside. For example, the client has no reason to settle little disputes, such as who gets the toaster, because there is no monetary consequence. The client has no reason to conserve telephone calls daily to your office. In effect, the client bought a pre-paid legal policy in which you, the attorney, has to do the petty bidding. In family law especially, the attorney has to exact reasonableness without challenging the client's sense that the attorney is loyal. In fact, arguments and disagreement might not be over fees, but they are prolonged because of the fix fee in family law cases.
There is simply nothing that is inherently special about the fix fee that allows an attorney to represent military, public officials, etc. for a lesser or no amount. Of for that matter to enter into a fixed fee agreement on a case-by-case basis. It is a straw man argument at best.
I have discussed, above, the leverage concept. There is no leverage in fixed fees in a family law case, except to gain clients by disguising what is typically lower earnings to the attorney and law firm. In most instances it is a fools game.
I have also already discussed this argument that you cannot place a retainer in your operating account. Of course you can and a fix fee offers the attorney no more flexibility on this point. The retainer must simply be reasonable and the contract needs to state it is non-refundable. You can say, My fee is $250.00 an hour (by way of example), if you will help me conserve time and money by working with me to handle things reasonably, I estimate we can complete this work for $2,500.00. You never know what will happen in a family law case, but we will work together to get this tasked accomplished for this amount, if possible. You will need to come up with this $2,500.00 retainer before we begin work. It is earned upon payment, and I will need for you to look over this agreement. If we go over this amount, we will sit down and discuss how best to handle it. Now, we cannot begin work until the retainer is paid in full, but it is very important that you work to get this case together and filed. What I would like to do is to get you to sign this agreement today. Can you pay half of it today? No. Five hundred? Okay. So, we will get $500.00 today, start gathering information to file this case, and then make arrangements with you to bring in the rest and sign all necessary pleadings. Is next Wednesday fine with you, or do you need an appointment for the following week?"
Chuck — Thank you for your comment. Two views are always better than one.