Advice on Flat Fee Billing from Two Lawyers Who Do It

This article summarizes key takeaways from the #ABATECHSHOW presentation “Flat Fees: the F Word You’ll Learn to Love” by flat fee pros Regina Edwards and Ashley Pepitone.  Summary based on my notes, compiled by Chat GPT with additional editorial review.

The Benefits of Flat Fees for Lawyers

This presentation on flat fees for lawyers opened by highlighting the benefits of flat fees. First, the speakers explained the problems with hourly fees including unpredictability, inefficiency, and client dissatisfaction with surprise bills and fee disputes. In contrast, flat fees provide predictability for both clients and lawyers in terms of revenue and workload. Flat fees also incentivize attorneys to work efficiently and develop effective systems for addressing tasks.

Next, lawyers don’t need to adopt flat fees all at once.  Instead, they can structure their practice areas to implement flat fees selectively, such as for business/transactional matters, individual/personal matters, family law, estate planning, criminal law, and immigration. Lawyers can also try flat fees for a limited period or specific types of matters.

Another benefit of flat fees is that they incentivize efficient communication by lawyers.  Lawyers can use technology to communicate efficiently, frequently, and involve clients in their cases. Lawyers should also take steps to develop robust communications policies for clients Various communication technology resources are available at TechShow.com to help lawyers stay efficient and keep clients informed.

Frequently Asked Questions About Flat Fees

The speakers then addressed common FAQs on flat fees:

FAQ 1:  What happens if a case drags out? 

A- Consider options such as charging flat fees per month or per trial day in court, or creating a phase-based fee schedule with a menu of services outlining fees for “extras.” 

FAQ 2- How can lawyers make more with flat fees compared to hourly billing when, for example, a divorce billed by the hour can be upwards of $50,000?

A- The speakers noted that hourly billing can be far more limiting than flat fees.  Under a flat fee schedule, a lawyer can charge a modest $5k for an uncontested divorce and handle them all the same day (for a total of $20k) whereas, on an hourly schedule, the fee would be much less. Flat fees also don’t depend on others to bill and collect so a  solo practitioner with no associates, small staff and systems can do very well.  The key is for lawyers to figure out how much they want to earn each month, and reverse engineering billing to design a practice, figure out what to charge

FAQ 3 – Are flat fees ethical? 

A- They are allowed under the bar rules of every state, but must be done correctly and in accordance with state requirements. [Editor’s Note – additional ethics of flat fee billing can be found at MyShingle and Attorney at Work]   

FAQ 4 – Will clients call and email more with flat fees? 

A- It can happen but managing client expectations is key.  To minimize calls, lawyers can use secure client portals or carefully worded case updates to keep clients informed without using up lawyer time.  Lawyers can also use a tight engagement agreement for flat fees with options such as a monthly subscription model, a fee schedule per event, or charging in stages.