“Fees Fi Fo Fum:” Part 4 – Fees Flatter Than a Pancake

We’ve reached the end of the road in the discussion of fee arrangements popular among attorneys here at Lawyers & Liquor.  So far we’ve covered three topics: that impending death of indigent representation with the proposed defunding of the Legal Services Corporation, the soul-sucking nature of the billable hour, the questionable concept of contingent fees, and now we’re moving on to the final major fee agreement you, as a new lawyer or a pigheaded client, may encounter in the day-to-day practice of law.  This is the unicorn of all forms of fees paid for litigation purposes, the one that makes battle-hardened attorneys look at you askew and wonder the weight of the anvil that must have struck your ass firmly on the head.

Of course, we’re talking about the amazingly unprofitable, but always requested, Flat Fee Agreement.

What’s a Flat Fee Agreement?

A flat fee agreement is something used by lawyers that don’t value either their time or their money, and who may be slightly masochistic.

Essentially it’s an agreement that the lawyer will represent you in a matter for $XXX.XX  and not a penny more.  The fee quoted and paid at the beginning of the representation is what the client pays for the attorney, and there won’t be any subsequent billings.  Of course, such an agreement will often leave the client responsible for the costs of the action, such as filing fees and copying expenses, but the attorney’s fee, like most of an attorney’s technology, is chiseled into stone and not changed by the circumstances of the case. That means a client, who otherwise may be put out of  court by the Ninja-billers that sneak like 18 hours of research onto the invoice, can actually plan their expenses and know where they’re at financially in the case, because the whole goddamn thing has been paid already.

But even with a flat fee agreement, the issue of “helping the indigent” doesn’t go the fuck away, because…

“Flat Fee” Doesn’t Mean “Low Fee.”

One of the common misconceptions over the flat fee case is that the fee is going to be some insanely low and immediately affordable amount.  This is definitely not the fucking truth.

For example, take a common flat-fee situation for a lot of lawyers out there, the criminal case.  A lot of criminal lawyers that I know won’t bill on an hourly basis.  They’ll bill on a flat-fee plus costs basis, because I don’t know if you know this or not, but it’s apparently really fucking difficult to collect an hourly invoice from Frankie Felon who’s doing 5 years in a maximum security “shank you in the shower” prison.  Cigarettes, out here in the real world, don’t have the economic value they do in prison, and besides your mortgage company probably has no interest in becoming a tobacco dealer.

In a criminal case, a lot of attorneys will do a flat fee agreement along the lines of “$X amount to this stage, $X amount due at this stage, and $X amount due prior to trial in the matter” if they want to be really nice.  For instance, in a recent case I quoted a fee as follows:  $2,500 from entering my appearance through arraignment with a goal of obtaining diversion, another $2,500 after arraignment if the case is set to trial through a plea deal if needed, and $5,000 due prior to trial.  Why?  Because before arraignment, I have shit to do to try to get a client diversion, after arraignment it’s time for motions work, and prior to trial (indicated by right after the case status conference) I’m gonna be doing a shit ton of work on your case.  Note, depending on the charges, your criminal history, and the market in the area the fees will change, but the $X/$X/$X flat fee for criminal work is pretty well set in stone for a lot of guys out there.

Don’t have the $2,500 to pay right off the bat? Take out a loan, call a family member, sell your shit, I don’t give a damn, but that’s paid before I even think about entering my appearance in your case.  Because there’s no guarantee you’ll pay me later, and once I’m in a criminal matter it’s hard as hell to get my ass back out.

So with that in mind, realize that a flat fee paid in advance doesn’t mean the lawyer is fucking giving their work away.

For Easy Things, a Flat Fee Makes Sense.

Keeping in mind that flat fee doesn’t mean you’re getting a deal like some sort of legal extreme couponer, I gotta admit that there are plenty of times a flat fee makes sense.  Hell, I’ll even let you in on a little secret of the legal profession.

Ready for it?

We recycle the fuck out of a lot of standard documents.

Take, for instance, a will.  If a married couple with an uncomplicated estate comes to me and wants a Will, a Power of Attorney, and a Living Will for both of them, I’m gonna quote them a flat fee of like $600.  $300 apiece.  Why?  Because simple wills for uncomplicated estates are so goddamn simple that I just use a template crafted over years of drafting wills.  Change some names, a few references, print the shit out, and bingo-bango-fucko we’re ready to rock and roll.  In that case, the majority of my fee is for the review of my own template to make sure it matches your desire and the time I spend with you during the client intake and the will signing.  My actual drafting time on six distinct legal documents, however, is generally well under an hour of my time.

And that’s if I even do the drafting.  Some things are so goddamn simple I can hand them to a paralegal and say “do this” then review the end product.

Same thing for simple deed transfers, helping you fill out forms, LLC formation documents.  We call those “ham and egg” matters, meaning they are the simple “no shit” practice of law that any qualified attorney can do without much of an issue, and likely has years worth of forms and boilerplate documents accrued or stolen in their files.  With the advent of computers, we don’t even have to retype the damn things anymore.

You want bespoke work, go to fucking Savile Row. We’re Sears off-the-rack at my office.

In those cases, which are really day-to-day legal matters, the flat fee is both inexpensive and practical, and can help those without the resources to deserve a multi-generational trust or some shit secure their financial futures for relatively little initial outlay.

However, not all legal problems are that fucking simple, and you need to realize…

Absolutely Nobody Is Taking Your Civil Litigation Suit on a Flat Fee, Because We End Up Spending Our Own Money.

Civil litigation is fucking expensive, folks.  It takes time to research and review a case, draft a Complaint, serve the aforementioned Complaint, wade through Answers and counterclaims, draft subsequent pleadings, file motions, engage in discovery, engage in settlement discussions, and, if all else fails, attend trial in the case.

Time for lawyers is literally money.  Every minute I spend working on one case is a minute I can’t spend working on another case, and as we discussed a few days back, minutes fucking count when you do any cases on a billable hour.  So maybe I take a litigation case on a flat fee, but that’s all the money I’m ever seeing from it, and if the case gets so goddamn complex and time-consuming that I’m ass deep in Interrogatories we’re going to quickly get to the point where I’m spending my time, and therefore my money, on your case that I took for a relative pittance because I had pity on you.

And that raises a question for lawyers and clients: how sure are you that when the money you’ve been paid already has been run through, you’re going to give the case the attention it deserves?  I do, because I’m an ethical attorney, but the practice of law is also a business, and at the end of the day you just can’t keep pouring resources into a case where your time is far exceeding the amount you’ve received.  Otherwise you end up litigating a case at less than minimum wage when you factor in the fucking hours.  I love my job, but if you tell me I’m not getting paid for doing it and I’m gonna start having second thoughts in the back of my beady little mind telling me to strap on a parachute, bail the fuck out, and let other counsel handle the goddamn matter moving forward.

Or, as the analogy goes, “Your fee account is the gas tank on this car of civil litigation.”

Some folks think the solution is to ask for more money up front to make sure you’ve covered all your bases.  But that just puts us back to “Now you’re asking for too much all at once!”

So What Then?

Well, we know flat fees aren’t the answer, because when the matter is more complex than a couple hours worth of work the attorney is likely to say “I want a really large amount upfront if I’m taking this on a flat fee,” and the client is likely to say “Oh fuuuuuuuck that!”  Besides, while flat fees may work for the indigent who just want to secure a future position, like a Will or a deed, it isn’t going to do jack shit for the client that in no way can afford that large amount.

And that’s what kicked this whole discussion off, isn’t it? Talking about how lawyers and the legal system can make sure the indigent are covered in civil matters.

So…that’s what we’re going to talk about Monday in Fees Fi Fo Fum (now that we have a firm fucking grasp of the subject matter):  How we can work to ensure the indigent get good civil representation by proposing changes and implementing innovation in fee arrangements.


One thought on ““Fees Fi Fo Fum:” Part 4 – Fees Flatter Than a Pancake”

  1. Somebody on the Twitterz the other day said the billable hour is dying, it denies access to clients, blah, blah, blah.

    I responded, “Okay, you want a flat fee for a patent application from drafting to issue or final? That will be $50,000.00, payable up front, no refunds. You think that’ll increase access to my services?”

    “Oh, you just want a flat fee to filing? Great. That will be $5,000 if you can provide me a certification from a licensed mental health counsellor that you have neither ADD nor OCD, and have no micromanaging personality traits. If you cannot provide the certification, it will be $25,000.00, payable up front, no refunds.”

    I can’t charge you a flat fee for filing a patent application because how long it will take is not up to me. Only the part where I draft it from your initial disclosure is. That I could probably ballpark pretty close after reviewing your disclosure: I’ve been doing this for a while. But once I send it back to you for approval (I can not file a patent application that the inventor has not approved as submitted.) if you go back and forth sixteen dozen times, making major changes, requiring new figures, the time required is going to skyrocket. And I am not paying it, because it’s not my fault. If I screw up and don’t draft to your disclosure? Of course I’ll fix that for free. But if you just can’t make up your damn mind? Nope. Pay me a lot now or pay me a little every time your brain misfires.

    Same, mostly, for copyright and trademark registration prosecution. We do have flat fees for the initial registration filing for those, because there’s only so many ways you can dick around with them before there’s no more room to argue. But even then that’s just to filing: prosecution is hourly billing. You may not need any additional prosecution: the registration certificate might just issue first try. Callah! Coolay! I’ll open it, review it, and mail it to you, no extra charge. See you at renewal time.

    Or some lunatic may file a two hundred page opposition that I have to read every word of and then respond to and yes, that is going to cost you money and yes, I am very sorry that’s how the system works, and no that’s not your fault, but it is your problem. Or, at the very least, it is not my problem.

    Same for most other thngs I do. I’ll draft you a license for a flat fee. But I won’t negotiate one for a flat fee, because I don’t know in advance whether any of the parties are what polite people call “real bulldogs” and what exasperated lawyers call “megalomaniac assholes who’d rather lose the business than give a goddamned inch.” You get the picture.

    So all you LegalTech and A2J people who keep trying to tell me the hourly bill is dying, kindly go away and think about what you’ve done.

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