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Hourly Rates v. Flat Fee Rates – What’s better for the Client?

The topic of attorney fees comes up a lot…. ok, well every day. I like to be open and honest with my clients; transparent if you will. Thus I thought a post about legal fees would be welcome by many people.

This is my JOB. This is how I pay my mortgage, feed my family, etc….  Thus I like to be compensated for my work. Yes, I offer free consultations and occasionally I do pro-bono work (no fee). However, by and large I want to be compensated for my time.

I bring 18 years of specialized experience to the table to give my client’s their money’s worth!

The question then becomes what’s best for the client in a fee arrangement?  Hourly?  Flat fee? Contingency?  Some combination of these?

Obviously each case is different, each client is different, and each attorney is different.

We do a lot of our work on flat fees because most of our clients seem to like to know exactly what they are going to spend. We put it in writing!  A lot of clients like to know.

Others are comfortable with hourly rates. Of course with hourly rates the total can exceed a flat fee or it could be less. It just depends on the case. That is usually not known at the outset.

A lot of clients compare the hourly rates of different lawyers without factoring in the experience. If I charge $275 an hour and a brand new attorney charges $175 an hour is it really cheaper to hire the new attorney?  Probably not.  In most instances the new attorney has little clue what they are doing, research every issue, spend 4 times as much time, may miss subtle nuisances that are not clearly written into the law, and similar. Thus in most hourly rate situations the more experienced attorney is CHEAPER; often much cheaper!

Beyond that you need to consider the honesty of an attorney’s billings.  We bill in 1/10th of hour increments (6 minutes).  Some attorneys bill in 15 minute minimum increments; they leave a voice mail for you and charge you for 15 minutes. Yes, really.  No going in what your attorney’s billing practices are.  Clients rarely question our bills because they are accurate and, if anything, we try to under-bill our time. On a rare occasion we make a mistake but usually the client forgot and once we talk the issue is cleared up.

A lot of our work is probate work which is generally covered by the California probate code statutory fee schedule. It’s laid out as a percentage of the estate. You know up front what that schedule is and, again, you will sign a written fee agreement so there are no surprises.

The bottom line is you should talk to your attorney up front and know what the fee options are. Know what choices you have and then make the best choice for YOU.

Good luck.  -John