~Lauren~
Pearl Clutcher
Posts: 3,876
Jun 26, 2014 3:33:18 GMT
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Post by ~Lauren~ on Aug 28, 2014 21:31:56 GMT
As many of you know, I am a matrimonial and family court lawyer.
For the last 30 years, like all matrimonial and family attorney's I know, I've charged a retainer and billed at an hourly rate. This meant that people would know the retainer amount but were clueless as to the total cost the divorce was going to cost because there was no way to predict how much someone's spouse was going to fight or how much my own client would want to fight.
Lately, when I've quoted my retainer, people ask "is that the total cost". I can certainly understand the desire to know how much as service is going to cost you. It's also frustrating for me when in the middle of a case the money runs out and the client has no more money and the case has to go on with me basically working for free.
So, I've been considering a "flat fee". It would mean that the initial fee would be higher than my current retainer but both my client and I would know that it was the complete cost to take the case from beginning to end. I would also agree to take payments on the fee because it's about 30% larger than my current retainer. The client has the advantage of making payments as opposed to a retainer fee which I require all up front.
Obviously, in any given case, I could end up working more for less or less for more, but the client has the same situation (ie, the get more of my time for less than the typical hourly rate or their case takes less time resulting in technically a greater hourly rate)
So, my question is this: if you were a facing a divorce and knew it was going to be contested with no idea about how much your total attorney's fees could ultimately be, would you want a flat fee with a payment option (with a fee higher than a retainer but would give you the peace of mind of knowing you didn't have to pay anything else no matter how much attorney time was involved) or would you prefer the usual "retainer" hoping that your particular case would be less than the flat fee. I will also say that the vast majority of my contested cases actually go beyond the amount I plan to ask for the flat fee. I will lose out on those fees but not having to have to try to collect that money owed is an advantage to me so worth doing.
FWIW: I don't plan to offer both options. It's too much paperwork. I'm just trying to decide whether to continue with the current, typical arrangement or the flat fee.
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Deleted
Posts: 0
Oct 11, 2024 2:24:04 GMT
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Post by Deleted on Aug 28, 2014 21:38:23 GMT
I think the flat fee would be attractive. If I liked two attorneys equally and felt they could represent me equally well, I would opt to go with the one who offered me a flat fee for the case. Especially in a situation like a divorce that can have dramatic impact on one's financial situation - if I could afford it at the beginning, I could afford it period. No surprises would be nice in that situation.
Be sure you are very clear when the case ends, though. You don't want clients thinking they can come back to you in two years with a custody problem and that would still be covered by the flat fee.
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Post by Basket1lady on Aug 28, 2014 21:45:26 GMT
Please God, may I never be faced with this decision. I would go with the hourly rate. But I'm a pretty logical person and I don't ever see a messy divorce happening. But I can definitely see why a flat fee would be attractive and would venture that the majority of people would prefer the flat fee. Especially with the option of payments. I would think that you would need some sort of cap on it to protect yourself from a really messy divorce. I would advise you to consult a lawyer, so ponder that over a glass of wine tonight!
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Post by anxiousmom on Aug 28, 2014 21:45:44 GMT
You know, the general opinion of attorneys is that they are all rich and charge high rates and fees just to keep up a certain life style-but based on my experience, not all are rich and most work really hard for the their clients. They don't realize that a sole practitioner has expenses-office staff, office space, court costs, etc. And they really don't understand just how much time goes into their specific cases.
So to me, a flat fee makes it easier for someone up front to understand costs, but I am going to say that it wouldn't be fair to you. You probably have a feel for how many billable hours goes into a typical case, but you know that a lot of them will go over that number. Honestly, if you want to go a flat fee route, I would say go hybrid...as in "typically most cases require xxx amount of hours, so I charge a flat fee. If however, I go over that number hours, I will charge xxx of dollars per hour." You can set what the flat rate number of hours and then determine case by case whether or not you want to charge over that...as I know a number of attorneys who give away a lot more time than any one ever knows about.
I know you said you didn't want to do both, but you deserve to get paid for your time.
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Post by redrulz on Aug 28, 2014 21:45:52 GMT
Like you said, divorces and custody battles can vary so much that I can't see how you could do a "flat fee" system very well. For one thing, I think people would over use you. Calling for every little thing. I think you would end up working your tail off for less money.
Divorces can be expensive. I don't think I've ever known anyone that paid a flat fee for anything divorce/custody related other than a quick, easy dissolution. Most custody related stuff can easily cost more than the wedding! (ask me how I know lol)
I think retainers are the best way to go to be compensated appropriately for the work you do. Be very clear up front that the retainer is a guesstimate and they will likely need to pay more if you go over. I can't imagine anyone expecting that you would work for free, but I guess there are many people if you are asking this question. lol
Do you *have* to keep working if they stop paying you?
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Post by kimpossible on Aug 28, 2014 21:47:58 GMT
The only time I've had to work with an attorney was last year after my father passed away. The trust was in need of some interpretation so we were looking for an initial consultation and some written communication that had to come from the attorney. We were quoted a retainer and an hourly fee. My sister and I were not surprised, but it lit a fire under us to only use him when we had too. Luckily we got some money back from the retainer.
I kind of like the flat fee approach because they would know upfront what the amount will be and can budget if necessary for it. I think the "unknown" is what makes folks a bit more apprehensive and nervous.
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Post by papersilly on Aug 28, 2014 21:48:50 GMT
I think a flat fee option would be more attractive to people. the thought of fees just going on and on frustrate people. people may be willing to pay a bit more if they knew the flat fee would be it. no other surprise charges.
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Deleted
Posts: 0
Oct 11, 2024 2:24:04 GMT
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Post by Deleted on Aug 28, 2014 21:49:49 GMT
I totally agree with anxious mom and redrulz that a flat fee may result in you not being compensated adequately for your time (though I am guessing this is being prompted by both the amount of uncollectible accounts you end up with and the amount of time/sanity you could regain by not having to do collections and hourly billings, so it might be a wash). But from a client perspective, it's an attractive option.
Many people getting divorced have probably never worked with an attorney before, and the costs, variables and billings can feel overwhelming at an already difficult time.
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Post by lucyg on Aug 28, 2014 21:51:55 GMT
My sister's best friend's divorce took over ten years, made the news, etc. Be sure you don't take on a case like that if you're going to charge a flat fee. Maybe it should only be good for two years or something?
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Post by sillyrabbit on Aug 28, 2014 21:52:50 GMT
In my rural area several attorneys have converted to the flat fee model. I personally would prefer that if I were going thru a divorce. There are so much unknowns during the divorce process that I think knowing exactly how much it was going to cost upfront would make things a little easier.
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jarmommy
Shy Member
Posts: 25
Jun 26, 2014 16:52:51 GMT
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Post by jarmommy on Aug 28, 2014 21:55:09 GMT
I would have loved a flat fee with payment options. I had to do my divorce myself because my ex is a loser who fought everything just because he wanted to be a dick. I never could afford an attorney and his gramma paid for his.
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Post by ChicagoKTS on Aug 28, 2014 21:56:51 GMT
I don't deal with family law attorneys but I do deal daily with real estate attorneys. I work on a corporate level where the ability to pay legal fees is not an issue. The issue is the mentality that many attorneys just charge too much and in the recent years it is far more prevalent for our customers to request a cap on fees. Because it is a buyer's market for real estate lawyers, I have found many attorneys willing to cap their fees rather than lose the business. And I am talking about attorneys from huge, well-known firms who prior to the real estate economic downturn who would have NEVER cut a deal on legal fees.
So where I am going with this is, have you considered this option as a compromise between a flat rate and an hourly rate? If you cap your fee, then the person at least knows the outside cost. It does provide some comfort. I am somewhat concerned if you charge a flat fee that it will give your client license to use you as much and as often as possible. It would be like an all you can eat buffet. I think they might drive you crazy with small things because they can and are determined to get their money's worth. With a cap, you still have some control to rein them in a bit.
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Post by scrappychick on Aug 28, 2014 22:08:27 GMT
I think a flat fee is a fantastic idea, but I think you'll end up losing money unless you make it more of a structured plan. Maybe offer a flat fee up to X amount of hours, and then another fee for the next set of hours, etc. This way you'll get paid for the riduclously long cases, and your clients will benefit from a fee system that allows payments.
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~Lauren~
Pearl Clutcher
Posts: 3,876
Jun 26, 2014 3:33:18 GMT
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Post by ~Lauren~ on Aug 28, 2014 22:11:07 GMT
These are some great ideas and alternatives. Thanks
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Toni Alexis
Junior Member
Posts: 89
Jul 18, 2014 16:16:02 GMT
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Post by Toni Alexis on Aug 28, 2014 22:13:47 GMT
Like you said, divorces and custody battles can vary so much that I can't see how you could do a "flat fee" system very well. For one thing, I think people would over use you. Calling for every little thing. I think you would end up working your tail off for less money. This is what I would worry about if I were in your place. Dh's ex is constantly calling her attorney and bugging her because she charges a flat fee. Us, on the other hand, have our attorney on retainer and call her as little as possible so that we don't incur too many hours of her time besides what she needs to do in our best interest. Every time we have to rehire our attorney, Laura (love her so much despite the fact that she's expensive), we give her a retainer and have aways ended up owing her more. If she offered a flat fee at 30% more than her retainer, I don't think we would have gotten our money's worth. That sounds harsh, but does that make sense? However, if we had paid a flat fee and didn't have the worry of calling her unnecessarily, maybe we would have fought the ex a little harder on some of her epic bullshit. Does that help?
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Post by ktdoesntscrap on Aug 28, 2014 22:26:21 GMT
I think its a good idea. My initial divorce was a reasonable amount of money because my ex represented himself and we worked out the details. Then he decided he got screwed and we went back last year.... it was an outrageous amount of money!!!
A flat fee would have scared my ex off and I think if we both knew we would spend $20K sorting out some minor stuff he would have worked at making an agreement!
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calgal08
Pearl Clutcher
Posts: 2,519
Jun 27, 2014 15:43:46 GMT
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Post by calgal08 on Aug 28, 2014 22:34:55 GMT
So where I am going with this is, have you considered this option as a compromise between a flat rate and an hourly rate? If you cap your fee, then the person at least knows the outside cost. It does provide some comfort. I am somewhat concerned if you charge a flat fee that it will give your client license to use you as much and as often as possible. It would be like an all you can eat buffet. I think they might drive you crazy with small things because they can and are determined to get their money's worth. With a cap, you still have some control to rein them in a bit. I agree with this. I'm a corporate paralegal - we offer: Hourly rate Flat fee - but we're very specific about what this does and doesn't include, it's the bare bones of required legal work. Honestly, if you only offer a flat fee I think you're going to get burned. I don't know about family law, but corporate litigation gets very expensive very fast. Plus, say you had a flat fee of $7k (I've no clue how much the average cost is), couples with a very simple divorce won't retain you because you're too expensive. How about a basic package (at a flat fee) which includes 2 hours consultation with you plus the basic necessary filings with the court. Anything more than that it's your hourly rate, plus court filing fees.
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tracylynn
Pearl Clutcher
Posts: 4,899
Jun 26, 2014 22:49:09 GMT
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Post by tracylynn on Aug 28, 2014 22:52:15 GMT
I think a flat fee is a fantastic idea, but I think you'll end up losing money unless you make it more of a structured plan. Maybe offer a flat fee up to X amount of hours, and then another fee for the next set of hours, etc. This way you'll get paid for the riduclously long cases, and your clients will benefit from a fee system that allows payments. I really like this idea. You probably know what the average hours spent on a typical divorce is (or can figure out based on your history). I'd use this number (or a maybe slightly higher) as my cap. Then come up with a certain additional fee for a certain additional hours. That way you're covered on cases that go ridiculously long. Also, someone else mentioned being very clear on what your flat rate did and didn't include - very smart!!! Good luck!
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Post by cbet on Aug 28, 2014 22:55:20 GMT
I'm also going to give you a bit of perspective from another industry - I work for a plumber and we considered the idea of flat fees instead of hourly rates. It would have been much easier for the service techs to do billings and collect on site.
What happened was that almost every customer quoted a flat rate who had an easy install called in to get their bill reduced, because the tech was "only there for a short time" . And when we didn't reduce the bill, because they were quoted the flat fee from the beginning, they pitched a fit and threatened to take their business elsewhere and to give us bad ratings with the BBB.
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Nanner
Drama Llama
Posts: 5,987
Jun 25, 2014 23:13:23 GMT
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Post by Nanner on Aug 28, 2014 23:01:23 GMT
For the client, a flat fee us definitely a more attractive option, but I would think you would be losing out in the long run. I know a few people who thought their divorces would be smooth, but turned out to be anything but.
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Post by Prenticekid on Aug 28, 2014 23:04:28 GMT
I know an attorney who has a capped retainer up to a certain point; then he renegotiates. The reason is because when clients pay a flat fee, clients may make decisions based on what they consider to be limitless attorney's time.
Another attorney has three payment options in his POA, and the client initials the one they prefer.
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Post by melanell on Aug 28, 2014 23:06:01 GMT
I like to have a budget, and I imagine that if I were in the midst of a divorce, I'd want one even more, so I would like the idea of a flat fee.
Plus, knowing my cost wouldn't change would give me a feeling of a slight advantage over the spouse with no idea how much their case might cost them. If they feel that I could presumably dig my heels in and make this case take forever, they may be more willing to bend to keep the fees for their own lawyer from climbing sky high.
And even if it didn't work out that way, a little boost of confidence at the beginning of divorce proceedings is a nice thing to have, I imagine.
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Post by gonewalkabout on Aug 28, 2014 23:13:45 GMT
However you'd want to work it, I think a payment plan/option is a good idea, for several reasons. If you're the only attorney doing that, I'm thinking you'd get perhaps a pretty good increase of clients too.
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uksue
Pearl Clutcher
Posts: 2,531
Location: London
Jun 25, 2014 22:33:20 GMT
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Post by uksue on Aug 28, 2014 23:14:21 GMT
I think a lot of clients- myself included- would love a flat fee, even if it was possibly higher than I might have had to pay. Knowing the full costs at the outset would be wonderful. I agree with what others have said however, with you maybe being abused and overused . We used to have legal aid here, and one of the reasons it stopped was because those on legal aid who paid nothing or were on capped fees thought nothing of constantly creating dramas and having endless letters sent out to their soon to be ex. My husband was on the receiving end of that- sometimes receiving three or four letters on Friday he could do nothing about until Monday, and which often contradicted themselves. Whilst you would have more control,because you work for yourself, I could still see that some clients would be unreasonable.
Some of these divorces drag on as others have also said- I am still no nearer getting divorced 5 years on ( the law has changed here and my ex keeps cancelling the compulsory mediation meeting we have to have to proceed. The only other way I could divorce him without his cooperation is a very expensive court case which I have no money for.)
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Post by mdoc on Aug 28, 2014 23:40:00 GMT
As the client, I'd want the flat fee. As the attorney, I'd be putting a whole lot of caveats on that flat fee. The client has no incentive to be reasonable. The client's spouse (who might end up paying the legal fees) has no incentive to be reasonable. Your time will not be respected. But once you put the caveats in, it's no longer a definite flat fee. Sorry, I'm no help at all!
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calgal08
Pearl Clutcher
Posts: 2,519
Jun 27, 2014 15:43:46 GMT
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Post by calgal08 on Aug 28, 2014 23:47:31 GMT
Another thought, I bet the majority of people have no clue the how expensive legal work is. How about having a 1 hour initial free consultation where you don't give specific legal advice just the general basics and also discuss possible cost scenarios. If you keep the retainer/hourly fee somewhere in your engagement letter explain when the retainer balance gets below a certain amount the client will have a [HASH] of days to add more funds or all legal work will stop.
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Post by smokey2471 on Aug 29, 2014 0:35:09 GMT
I would think if you raised your retainer fee to cover what you are considering charging for the flat fee. You can tell them this covers x amount of hours and x amount of court papers filed etc.
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Post by chirpingcricket on Aug 29, 2014 0:39:49 GMT
The attorney for whom I work would never do a flat fee, not at the level that he's at now. He only does really complex contested divorces and custody issues. A lot of adoption attorneys in our area do adoptions for a flat fee, but I haven't heard of any family law attorneys who do the contested divorces doing flat fees.
If you can only do agreed divorces, then yes, a flat fee makes sense. But ... don't agreed divorces mostly go pro se?
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luvnlifelady
Pearl Clutcher
Posts: 4,428
Jun 26, 2014 2:34:35 GMT
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Post by luvnlifelady on Aug 29, 2014 0:40:06 GMT
I agree that a flat fee would have to have a cap, otherwise, people will be contacting for every little grievance they have with their ex. This may not be a risk, but would offering a flat fee reduce your credibility? Some may perceive you as being new to the game and therefore looking to get clients by being on the "less expensive" side. Is all you would have to do is make it known how long you've been in business though to squelch that problem.
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~Lauren~
Pearl Clutcher
Posts: 3,876
Jun 26, 2014 3:33:18 GMT
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Post by ~Lauren~ on Aug 29, 2014 0:53:34 GMT
Again, thanks for all the comments. You've all raised some excellent points and ideas. I really appreciate it
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