Flat fee pricing is a new trend in the law. The traditional hourly billing method really causes the attorneys interests and the client’s interests to conflict. We have all heard stories about attorneys who like to run up legal fees by continuing to litigate over seemingly minor issues. Under an hourly billing system, continued fighting and litigation benefits the attorney financially, while hurting the client. You could say the hourly billing system encourages inefficiency. To further prove my point, if you were to ask an attorney who used the hourly fee system what the total cost of a case would be, they could not answer you. I know, I have been asked that question myself before I switched to flat-fees. Unfortunately, that places all the risk of the transaction on the client, who likely knows very little about how much litigation costs.
Conversely, a fixed fee system accomplishes two things that the hourly system cannot. First, a fixed fee system encourages a quick case. Secondly, it shifts the some of the risk to the attorney. For instance, if the attorney knows that he or she is only going to make as much money as the fixed fee, there is a strong incentive to resolve the case quickly. This eliminates needless litigation and fighting. Typically, the clients want their case resolved quickly, in a fixed fee model the attorneys do as well. In that sense, a fixed fee agreement aligns the interests and goals of the attorney and client, and when two people have the same goal, it’s a lot easier to work together. Lastly, clients love knowing what their total out of pocket cost is going to be. Let’s face it, family law issues usually come at financially stressful times. The last thing people want to worry about is getting another bill from their attorney. Under the fixed fee model the client makes the initial payment, the attorney and client both work towards a common goal of resolving the case, and nobody must worry about having uncomfortable conversations about money.