what is a flat fee lawyer

Full Answer

How to flat fee bill as a lawyer?

Lawyer Billing: Flat Fee Plus. What I refer to as “flat fee plus” involves charging a flat fee for a project with a limited scope and then charging the client your hourly rate for any work performed beyond that. This is what I currently charge to file a trademark with the USPTO — a flat fee to do a trademark search and submit the ...

What is the average hourly rate for a lawyer?

The most expensive lawyers are now charging upwards of $1,500 per hour for the elite, but the average attorney hourly rate is nowhere near that high. The typical person can expect to pay between $200 and $520.

What is an attorney flat fee?

What Is a Flat Fee? A flat fee typically means that the lawyer charges a fixed, total fee. This is generally offered if your case is relatively simple or routine. Simple cases might include: Writing a basic will; Overseeing a real estate closing; An uncontested divorce; Power of attorney.

What is the average cost of a lawyer?

The average hourly attorney fee is between $300 – $400 per hour. Once the retainer has been exhausted, the client will be required to replenish the retainer back to its original amount and the attorney will again bill against the retainer for time spent on the case until the money runs out.

What is a flat fee client?

For firms using a flat fee arrangement (also known as “fixed pricing”), clients pay an agreed-upon amount upfront. This payment covers all the work that is to be performed. Flat fee agreements are common in practice areas like criminal law.

What is flat fee retainer?

In such matters, instead of hourly billing for professional services, we can offer a fixed, or “flat,” fee to cover all services and costs in the retainer agreement. This fee is paid, in part or in full, upon signing the retainer agreement.

What is the difference between a fixed fee and a flat fee?

A fixed fee covers more than one matter. For example, a law firm agrees to a fixed fee to cover all EEOC charges against a company for a period of time. What differs from a fixed fee is a flat fee. A flat fee (also known as a “flat rate”) covers the cost for a single matter or task.

Do you get retainer fees back?

The retainer fee is normally non-refundable and not a credit for future services.

Is a retainer fee refundable?

Most frequently, the client agrees to a security or an advanced payment retainer where payment for services is drawn from the monies held in trust. Here's the kicker—only the true retainer is non-refundable. Unearned funds from either a security or advanced payment retainer must be refunded at the end of the work.

How does flat rate pricing work?

Flat rate pricing means offering your customers a set price for a specific job, regardless of the number of hours it took to complete. When priced correctly, a single, fixed price will cover the direct costs for time and materials and the indirect costs of overhead expenses, while still giving you a healthy profit.

What is a flat rate example?

For example, let's say you're a freelance graphic designer and charge a flat rate of $400 for a logo design. Regardless of whether it takes you one hour or 20 to complete, or if a customer asks for multiple revisions, you will take home $400.

What is flat payment?

Flat rate pay is payment based on each job that's completed. An employer or manufacturer estimates the amount of time a job should take. The employer pays the technician a predetermined amount for that job, based on the expected time. For example, say the flat rate of a job is based on two hours.

Why do law firms use flat fee?

Flat-fee arrangements can put law firms under pressure to turn work in the shortest amount of time, so the firm can profit off the spread between the price commanded and the cost of labor required. However, a good law firm will recognize that only high-quality work will keep the client coming back for future engagements.

What happens if you negotiate an hourly fee?

If your negotiated price is lower than it would have cost at an hourly rate, you’ll end up saving money. Fewer fee disputes. Since you’ll know exactly how much you’re paying ahead of time, you’ll save a lot of time and energy by not haggling down unexpected attorney fees that could crop up on an hourly model.

What types of legal services are good candidates to be charged as a flat fee?

Flat fees are especially well suited for lawyers who handle a large volume of a particular type of matter or project. What makes a flat fee successful and profitable for lawyers is when you can employ consistent and standardized workflows.

Pricing and Flat Fee Rates

How does an attorney determine the type of work to bill on a flat fee basis and how to set fee rates? First, you need to take a step back and look at your own practice.

Benefits of Flat Fee Pricing

Incorporating flat rate billing will undoubtedly give you a competitive edge. It has been demonstrated that clients like the certainty of flat fees even if the attorney proposing a billable hour arrangement “estimates” a lower fee.

The Ethics of Fixed Fee Arrangements

Many state bars still want attorneys to record their time, even when using a flat fee billing arrangement. Otherwise, it is difficult to determine what constitutes a “reasonable fee.” And for this reason it remains the best practice to do so.

Fixed Fees Can Make You More Profitable

Depending on your practice area, flat fees can be a boost to profitability if managed correctly. It’s obviously easier to get started with transactional work than with complex litigation. But any type of repetitive work can lend itself to a flat fee.

Conclusion

The smart way for a small firm to give flat fee billing a try is to dip your toe in. Decide that over the next 12 months you are going to convert 10% of your firm revenue to flat fee billing. As time progresses you will get better and more efficient, and you will see the profit margin on your flat fee billings exceed those of the billable hour.

What is a flat-fee divorce attorney?

Unlike a traditional lawyer who often charges fees based on hours and expenses (normally the cases in family, civil, and criminal cases), flat-fee attorneys provide an upfront fee covering everything. Clients know exactly what they will be paying from the very beginning.

How do flat-fee attorneys set their fees and prices?

It can be tough for a divorce lawyer to set a standard flat-fee for a divorce or any proceeding. They will often average out a certain number of cases and their costs and then set their price from there. For example, if one lawyer had a typical hourly rate of $500 an hour. Last month she had 5 divorce cases.

What are some issues with flat-fee attorneys?

When an average is calculated to come up with a flat-fee, if there are any outliers, such as tough cases that consumed quite a bit of time and expenses, this can skew the honest average available.

How does a flat-fee divorce in California differ from a flat-fee divorce in New York?

Across America, the flat-fee process is typically the same. In New York State, many flat-fee attorneys charge a rate that only covers attorney-client communications itself and leaves everything else to a separate account.

Why charge flat fees?

Flat fee attorneys can cater more specifically to clients’ unique needs. Furthermore, flat fees add value to law firms’ services. An increased value proposition to clients generally means more clients will be interested in working with you.

1. Flat fees promote efficiency

Whether you’re a flat fee attorney or not, law firms need to be as efficient as possible to keep costs low and cash flow as high as possible. Being efficient also contributes to providing clients with a client-centered experience, since inefficiency would mean that clients are paying more than they should for your legal services.

What are the different types of legal fees?

Many lawyers charge by the hour, but lawyers can adopt many alternative legal fee models: flat fees, contingencies, subscriptions, and unbundled legal services. The billable hour is far from the end-all-be-all of legal fees. Finding the right fee arrangement for you and your clients is key to running a successful law firm.

2. Flat fee attorneys are rewarded for embracing technology

Lawyers are constantly investing in technology that makes them more productive. Document automation, practice management software, and E-discovery are all examples of this. But investing in technology that makes you more productive can harm your bottom line when you bill by the hour.

3. Flat fees reduce administrative work

Call it the “bureaucracy of billing:” Billing by the hour necessitates an army of bookkeepers and the effort required to meticulously pore over Work In Progress reports and invest in simultaneous time tracking.

4. Flat fee attorneys have a competitive advantage

In a world where everyone is billing hourly, distinguishing yourself from your competitors by offering peace of mind and cost assurance of flat fees can significantly benefit your firm.

5. Flat fees establish attorney-client trust

If clients know they’re paying for every phone call, email, meeting, or minute of your time, they’re likely to be a lot more apprehensive about contacting you to share information. If there’s no surcharge for client communications, there’s a higher likelihood they’ll engage.

Lawyer Billing: Flat Fee

When I was a solo practitioner, I used flat fee billing for almost all of my work. I did not lift a finger on behalf of a client until I had a signed engagement agreement and their check cleared. My engagement agreement stated that fees were earned on receipt so I could deposit it directly into my operating account and bypass the trust account.

Lawyer Billing: Flat Fee Plus

What I refer to as “flat fee plus” involves charging a flat fee for a project with a limited scope and then charging the client your hourly rate for any work performed beyond that. This is what I currently charge to file a trademark with the USPTO — a flat fee to do a trademark search and submit the application with up to $225 in filing fees.

Hourly Billing

This is the classic model that exchanges hours for dollars. I recommend hourly billing for any matter that involves an opposing party. We can’t control how much work we will have to do because of the opposition.

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How much does a lawyer charge per hour?

Hourly Rate: The lawyer will charge you for each hour (or portion of an hour) that the lawyer works on your case. Thus, for example, if the lawyer's fee is $100 per hour and the lawyer works 5 hours, the fee will be $500. This is the most typical fee arrangement. Some lawyers charge different fees for different types of work ...

What is a statute fee?

Statutory Fee: The fees in some cases may be set by statute or a court may set and approve a fee that you pay. These types of fees may appear in probate, bankruptcy, or other proceedings. With all types of fee arrangements you should ask what costs and other expenses are covered in the fee.

What does retainer fee mean?

A retainer fee can also mean that the lawyer is "on call" to handle your legal problems over a period of time.Since this type of fee arrangement can mean several different things, be sure to have the lawyer explain the retainer fee arrangement in detail.

What is contingency fee?

Contingency Fees: The lawyer's fee is based on a percentage of the amount awarded in the case. If you lose the case, the lawyer does not get a fee, but you will still have to pay expenses. Contingency fee percentages vary . A one-third fee is common.

Do lawyers charge different fees?

Some lawyers charge different fees for different types of work (legal research versus a court appearance). In addition, lawyers working in large firms typically have different fee scales with more senior members charging higher fees than young associates or paralegals.

Can a lawyer make contingency arrangements?

Lawyers may also be prohibited from making contingency fee arrangements in certain kinds of cases such as criminal and child custody matters. Contingency fee arrangements are typically not available for divorce matters, if you are being sued, or if you are seeking general legal advice such as the purchase or sale of a business.

How much does an hourly lawyer charge?

The retainer is based on the hourly rate. Make sure to ask the attorney what his/her hourly rate is. Hourly attorney fees range from $300 to $900 per hour depending on the attorneys experience and credentials.

Can you charge flat fees for divorce?

When flat fees are offered, the client can be assured that hourly rates would not be charged—only flat fees. In addition, most attorneys will offer a payment plan for a flat-fee divorce. There are some occasions where a flat-fee model may change to an hourly/retainer model.

Do all attorneys work on a flat fee basis?

Filing fees or other court fees are additional. Not all attorneys will work on a “flat-fee basis,” so you shouldn’t discount an attorney who doesn’t. However, if the case is less predictable, the attorney may offer flat fees as the case proceeds.

What is flat rate legal fees?

Flat rate legal fees are when an attorney charges a flat rate for a set legal task. The fee is the same regardless of the number of hours spent or the outcome of the case. Flat rates are increasingly popular and more and more attorneys are willing to offer them to clients.

Why do attorneys charge different fees?

Some attorneys charge different amounts for different types of work, billing higher rates for more complex work and lower rates for easier tasks .

Why do lawyers need to put contracts in writing?

A written contract prevents misunderstandings because the client has a chance to review what the attorney believes to be their agreement.

What are the biggest concerns when hiring a lawyer?

Attorney fees and costs are one of the biggest concerns when hiring legal representation. Understanding how attorneys charge and determining what a good rate is can be confusing.

What are the costs of a lawsuit?

Some common legal fees and costs that are virtually inescapable include: 1 Cost of serving a lawsuit on an opposing party; 2 Cost of filing lawsuit with court; 3 Cost of filing required paperwork, like articles forming a business, with the state; 4 State or local licensing fees; 5 Trademark or copyright filing fees; and 6 Court report and space rental costs for depositions.

What factors determine if a lawyer's fees are reasonable?

Factors considered in determining whether the fees are reasonable include: The attorney’s experience and education; The typical attorney fee in the area for the same services; The complexity of the case; The attorney’s reputation; The type of fee arrangement – whether it is fixed or contingent;

How often do attorneys bill?

Attorneys usually bill in 1/10 th of an hour increments, meaning you will be charged 1/10 th of the hourly rate for every 6 minutes the attorney spends on your case. The most common billing frequency is monthly, however, some attorneys will send bills more frequently, others less frequently.