Fixed Price Legal Services: Everything You Need to Know
When determining fixed price legal services, you'll need to consider various options.3 min read
When determining fixed price legal services, you'll need to consider various options. You may charge your clients different pricing options, such as fixed fees, hourly billing, alternative fee structures, and contingency fees. A flat fee arrangement or fixed pricing is a set amount that the client pays at the beginning that covers all work that needs to be done. This model is often used in misdemeanor and criminal cases.
How Does a Fixed Pricing Work?
Because of the time-insensitive and intricate nature of dealing with criminal issues, lengthy pleadings, unforeseen motions, and numerous court appearances, some criminal cases won't be appropriate for hourly rates. The use of contingency fees is prohibited by ABA Model Rule 1.5(d)(2).
The same model is helpful for matters that are form-intensive where the type of work is usually predictable. This includes the following:
- Will drafting
- Regular immigration matters
- Uncontested divorce
- Personal bankruptcy
These cases are made more complicated due to the circumstances of the client, so the correct questions need to be asked before taking a case for a flat fee.
General Retainer vs Special Retainer
It's easy to get confused on retainers, as there are a variety of different ones. General retainers get paid to attorneys so they're ready for services to be performed. Special retainers often have a type of security from which payment gets deducted when it's earned or an advanced fee that's for any work in the future that is performed. The retainer for the advanced fee is comparable to the concept of the flat fee. The retainer amount needs to show a specific number of billable hours for an hourly rate.
Various kinds of retainers are used in different types of cases. However, the arrangement's parameters should always be thoroughly defined. You should consider several questions, such as if the goal of the retainer is to secure the availability of the attorney, what will the payment arrangement be for work that's performed? You'll also want to know what the parties consider completion of the work if the retainer comes from security where earned fees are taken out. It also needs to be stated what happens when that retainer is exhausted.