Can Fixed Fees and Limited Scope Fee Arrangements be of benefit to consumers of legal services?
The billable hour fee structure is the gold standard for law firms. A client will pay a huge retainer into a lawyer's trust account and hope the lawyer will bill against it with the client's best interests at heart.
The problem is that the billable hour fee agreement was designed to improve law firm profitability, and had nothing to do with improving legal services for the consumer. In fact, in 2001 the ABA recommended lawyers work 12-15 hours per day, 48 weeks per year to achieve a profitable billable hour quota for their law firms.
How does this contribute to a healthy, family friendly life style? How does this benefit the consumer? Is it any wonder the the legal profession is in crisis and that lawyers are at the highest risk for suicide of all professions?
4 of my colleagues have committed suicide during my 31 years as a lawyer. What other profession can say the same?
The reality at present is that the public, i.e. our consumers, hate the billable hour (and by extension- us) because they never know how much the case will cost and feel lawyers too freely bill their trust account at an exorbinant hourly rate. Lawyers are literally committing suicide due to the stress endemic in this kind of practice. And, as a result of the high cost of legal fees, most consumers are simply unable to afford full service legal representation any longer.
This does not sound sustainable.
A solution is limited scope fee agreements that are paid on a fixed fee basis. These arrangements are ethically permitted so long as there is full disclosure. If a lawyer knows the extent of their representation at the outset of a case, they can then offer a fixed fee for that specific scope of work. Once the scope is completed, the lawyer and client can negotiate the next phase of representation.
For example, in a divorce case, an initial scope could be drafting pleadings, a motion for temporary relief, and a temporary consent order for a fixed fee of $2,500. If their is to be a contested temporary hearing, that would be a different scope with higher fixed fee of perhaps $3,500 to $5,000. The next scope could be discovery, followed by a scope for mediation, and so forth and so on.
Marble Law is pioneering this approach on the West Coast. Other attorney's are experimenting with the same. In my practice I have always charge fixed fees for drafting agreements, uncontested adoptions, uncontested divorce and custody matters, and even contested Rules if they're not too complex.
Fixed Fees eliminate the stress of hourly billing and contribute to a better client-attorney relationship. Clients appreciate knowing the cost up front, and are grateful to be able to sometime go "off topic" when talking with the lawyer without worry about being billed for it. As an attorney, I love being able to talk with my clients about Baseball and such without worrying about billable hours. As a result an easier, more comfortable, trustful relationship will often result.
And that would be a definite improvement to our current state of affairs.
Guy J. Vitetta, Esq.
Charleston, South Carolina