What are you buying when you hire a lawyer? Are you really buying their time? Aren’t you really buying a certain task or a certain result, and their intellectual abilities to get there?
We are trying to change the way clients pay for services in family law cases in Southern Maryland. This post explains why this change is needed and describes the alternative fee arrangements we use.
Different types of law typically use different types of billing arrangements. The typical billing model for family law cases has always been the billable hour – you pay your lawyer at an hourly rate. You pay for time, not necessarily results.
This model works great for attorneys! But it is not a great model for clients. We think it needs to change.
What is Wrong with Billable Hours?
There are several reasons billable hour fee arrangements do not work for clients.
Your expenses are unlimited
If you pay your attorney by the hour, your expenses are completely open-ended. You have no idea how much your divorce or custody case will ultimately cost. You cannot predict it or budget for it. The sky is the limit, and you may be paying off this expense for years to come.
Your attorney is rewarded for inefficiency
Think about what you are paying for with that billable hour? Your attorney should be rewarded for efficiency and production. If you are paying by the hour, you are rewarding your attorney for being slow and inefficient. They make more money if they take more time to do the job. Does this make any logical sense?
Time does not equal value
You want value for your money. Just because your attorney gave you X hours of their time, doesn’t mean you actually received any value. But if a task is completed, you received value for the money you paid for that task.
Your interests are not the same as your attorney’s interests
You want this family law case over as soon as possible. The longer this drags on, the worse it is for you and your family. You have a tough situation right now, and it stinks. You want a positive outcome that lets you get on with our life.
But when you pay by the hour, the interests of your attorney are different. The longer your case drags on, the more money your attorney makes. The more litigation – the higher the bill. If your attorney is unscrupulous, they can do things to make litigation more likely, which will fatten up their paycheck at your expense.
Most attorneys we know are very professional and would never do this. But some attorneys do engage in this behavior. You won’t know who they are until it is too late. Why should your billing arrangement encourage and reward this behavior?
Why do clients agree to pay an hourly rate?
Because they have no other options! As far as we know, we are the first law firm doing this for family law cases in Southern Maryland. Paying lawyers using alternative fees has become common for large corporations and insurance companies. But for individuals as clients, it is still very cutting edge. It just isn’t how most attorneys work.
Most people who need a family law attorney cannot postpone their need to shop around. You need a domestic relations attorney, because you have a domestic situation – now! So, most clients just bite the bullet, pick an attorney they like, and sign that open-ended hourly rate retainer agreement.
Task Based Billing
What if there was an option? What if you could hire an attorney and know up front how much it was going to cost? What if you could plan on it, budget for it, and know this domestic matter wasn’t going to cost you your life savings?
At Andrews, Bongar, Gormley & Clagett, we have developed a different system. We call it Task Based Billing. In this billing model, you will pay a specific fee for each stage of the case. Each stage of your case requires certain tasks. You pay for the task, not the time it takes us to accomplish the task.
This works like a flat fee, but each stage has its own flat fee. The result is one total fee you will pay at the end of the case. And if the case ends prematurely (that does happen sometimes, even in family law disputes), you get back the money you paid for future stages of the case that didn’t yet happen. You will never overpay for your legal services.
This task based billing model rewards your attorney for being efficient, working smart, and getting things done. The more time it takes to complete a task for you, the worse it is for us. The longer your case drags on, the worse it is for us. Your interests are the same as your attorney’s interests. That is exactly how you want it!
How can we do this?
We can do this because we have handled thousands of family law cases. We know the work your case is likely to require when we first meet with you. Therefore, we can comfortably set a price for our services. Many things can delay your case that we have no control over. If things don’t move along like they should, and things take a little longer, we suffer too. We take that risk with you. We shouldn’t make more money just because your case was delayed by the Court. That doesn’t make sense!
This method is already being used by large corporations and insurance companies to pay their attorneys. Long ago they saw the folly of paying their lawyers by the inefficient billable hour. Shouldn’t you be doing the same thing?
Efficient Yes. Cheap No.
We have to warn you though. While this is a more efficient way of paying an attorney, it is not necessarily a cheaper way. We are not trying to be the cheapest attorney. In fact, we charge a fair fee for our services, and you should be prepared to pay a fair fee if you want to hire us. We do want to be efficient and fair. We do not want to be cheap. If you are simply looking to cut costs as much as possible, we may not be the right attorney for you.
The Big Exception
We have to warn you that there is a huge exception for hotly contested family law cases. If your case is going to be a knock-down drag-out fight, we cannot handle the case in a task based manner. That sort of case requires an hourly billing model.
If your Ex is irrational, unreasonable, and angry, they can engage in time-consuming and inefficient litigation that will take many hours of work. If that happens, we will convert your case into an hourly rate case. Your retainer will explain this in detail and you can discuss it with your attorney during a consultation. You will know ahead of time when this will happen, and you will be able to bail out if you don’t like it.
If you want a system in which your interests and your attorney’s interests are the same, where you pay your attorney for efficiency and results, and where you can have some control over the fees you are paying for your family law case, please give us a call and make your appointment for a consultation today.