Why do you offer flat fees?
We believe that legal services are changing and that a "billable hour" is not the best measure of the value delivered to clients. There are many reasons why hourly billing sucks, but here are a few:
- Lawyers have no incentive to do things more efficiently
- Clients may avoid communicating with their lawyer because they don't want to be billed for the time
- Hourly billing creates tension between clients and attorneys when the client feels they have been over-billed for something, or if they are billed for something that didn't help their case.
- Clients may not want to push back on their lawyer's billing practices during their case and by the end of their case it may be too late
- Lawyers that bill hourly writeoff 10 - 20% of the hourly fees they bill to clients, so there may be some padding or "rounding up" with that in mind
- Costs are unpredictable, you may have to come up with $10,000 to $20,000 at a time to replenish your retainer, and if you can't your attorney will likely withdraw from your case
- Time tracking and invoicing for hourly services take time. Sending an email that takes 3 minutes takes another 2-3 minutes to record in a time-tracking system or even write down. To us, this is a big waste of time. Also, guess who pays for that extra 2 - 3 minutes?
What's so great about flat fees?
Besides everything? Here are just some of the reasons we love flat fees:
- We are always on the same team as our clients
- We have every incentive to do things better and more efficiently
- We don't have to deal with client billing disputes over surprise invoices
- We don't have to make choices about where to spend our time based on which clients have money in their retainer accounts
- We can spend more time digging into interesting issues
- We can work as a team. If we need expertise from another attorney on our team for your case, you don't pay anything extra
Are you changing to flat fees from hourly billing?
Nope. We started from the beginning (in 2018) deliberately focused on offering flat fees for all family law cases. At the same time, we want to provide a client experience that you will tell your friends about. We are focused on doing things efficiently while ensuring the client has a great experience working with us, no matter how they are billed.
Full Transparency: we have learned that not all cases are right for flat fees. Contested custody cases, for example, are extremely unpredictable. Because of this, we now limit the cases that we offer on a flat-fee basis to divorces that do not involve contested custody of children. That doesn't mean that we will not offer flat fees to clients that have children, we just need to understand the parties' situation to determine if a flat fee is the proper structure.
Why is your flat fee higher than another lawyer's retainer fee?
This is the biggest challenge we have when explaining our flat fees to potential clients. Most attorneys in Massachusetts require an initial "retainer fee" of $3,500 to $10,000 for a divorce, usually a little less for child custody or child support cases with unmarried parents. A retainer is simply a pre-payment for services. The lawyer is required to place the retainer into a trust account (or "IOLTA" account in Massachusetts) and keep track of each client's trust account balance. When a lawyer works on a client's case, they transfer the client's funds out of the trust account and into their own account as income or earnings for the work performed.
We have an initial upfront payment, but it is a portion of the total fee and the remaining fee is billed on a weekly or bi-weekly basis.
Will I pay more if I hire a divorce or family law attorney who bills flat fees?
Maybe. Or maybe not. No lawyer can tell you at the beginning of your case how much effort will be involved, so the hourly cost could come out higher or lower than the flat fee at the end of your case. Part of the reason people are moving towards flat fees is that it provides a level of certainty about the cost. For some people, knowing the cost upfront gives them peace of mind.
Here is an example that might provide some perspective. Two families are planning vacations, the Smiths and the Hamiltons:
The Smiths book a trip to an all-inclusive resort, which includes all drinks and meals while they are at the resort. They can eat and drink as much as they want and not worry about the cost of ordering an appetizer or how much each margarita by the pool is costing them.
The Hamiltons book a trip to a resort that doesn't offer an all-inclusive option. They know they will pay for each meal as they go, and also pay for each drink they order.
When their planes take off, who will spend more on their vacation? Nobody knows yet. They won't know until both families depart for their flights home. During their vacation, the Smiths didn't spend time thinking about the cost of each drink or each meal. The Hamiltons received a separate bill for every meal and paid for each drink they ordered. Some people are more like the Smiths and would rather know how much they are going to pay ahead of time, and just knowing the cost allows them to enjoy the trip without thinking about the cost of the appetizer at dinner. Some people are more like the Hamiltons, they order whatever they want and don't have the voice in their head constantly reminding them that the daiquiri they just ordered cost $15. Does this mean that one type of vacation is better? No, but some people have a better experience with one type compared to the other.
For what types of cases do you offer flat fees?
Uncontested Divorces, or "1A" divorces. We handle many of these cases, and nearly all are done on a flat fee basis. In these cases, the parties have a good idea of how the divorce will be resolved, but they need assistance drafting the pleadings, separation agreement, and financial statements. We nearly always represent one of the spouses, and the other spouse may or may not obtain an attorney to review the agreement as drafted. Sometimes we highly recommend that the other spouse obtain their own attorney, and other times we don't, it depends on the complexity and whether or not the parties' agreement lines up with what a court would do if asked to decide the case. If the agreement is pretty close to how a court would decide the matter anyway, then a second attorney probably isn't necessary.
Certain Contested Divorces, or "1B" divorces. Some contested divorce cases are a good fit for a flat fee. It is probably easier to call out the cases that are not a good fit for flat fees, and those include divorces involving family-owned businesses, divorces with significant assets, high-conflict parties, contested custody of children, or parties looking to fight for the sake of fighting. Basically, if your case has issues that could go in many different directions, we typically will not offer a flat fee or the flat fee may be too high to consider.
Limited Assistance Representation ("LAR"). We offer services on a Limited Assistance basis, which means that you can hire us to assist with a particular part of your case. An example of this may be an initial filing for custody of a child born outside of a marriage. For clients who cannot afford to hire an attorney to do everything for them, we can do the initial filing, file a motion for temporary orders, and represent the client at the first hearing. The first hearing is often the most important, but it could be a subsequent hearing. Other things we have done on a limited basis include discovery requests or responses, drafting pleadings and memos of law, or assisting clients in the background of their cases without appearing in court.
Are you the only attorney that offers flat fees for divorce and family law?
We definitely are not the only firm or the first firm to do this. We didn't model our flat fee structure on the way other firms that do offer flat fees structure their fees and services, we developed our fee structure organically over time as we grew and learned what works and what doesn't. We occasionally tweak our fee structure, but when we do, it only applies to new clients going forward. Below are links to some other attorneys that offer flat fees, it may be helpful to read some different perspectives on flat fees for divorce and family law.
Edwards Family Law (Atlanta, GA)
DeTorres & DeGeorge, LLC (New Jersey)
Why don't more attorneys offer flat fees for divorce and family law?
In general, lawyers tend to be risk-averse. With flat fees, there is some inherent risk that any case could exceed the level of effort expected. For lawyers that have always billed hourly, they see this as "working for free" because they are essentially doing work that they could have billed to the client under an hourly fee arrangement. Offering flat fees requires a completely different mentality. We expect that every case will be different, but there is a consistent level of effort for most divorces. Some may take a little more effort and some may take a little less effort, and some may even take a whole lot more effort. It happens, but, on average, it works itself out. To offer flat fees, the attorney has to be OK with assuming that risk and not worry about the time spent on any individual case.
Below are links to some attorneys who are opposed to flat fees and explain why they think flat fees are bad for clients. Just to be clear, we don't think people that are opposed to flat fees are bad or are doing anything wrong. We certainly disagree, but we respect their opinions and we understand where they are coming from. We think it is important to understand both fee structures and what fits best for you and your particular situation.
Stern Perkoski Mendez (Chicago, IL)
Nelson, Krueger & Millenbach, LLC (Wauwatosa, WI)
Another lawyer told me flat fees are bad for clients.
Here are some of the things we have heard other lawyers say when explaining why flat fees are bad for clients. Most of these actually highlight problems with hourly billing:
Flat fees overcharge some clients.
This is simply not true, and it relies on the assumption that a lawyer's time is equal to the value they provide. But for the sake of argument, let's say hourly billing is the only way clients could purchase legal services. Is a lawyer that charges $500 per hour for divorce providing twice as much value as the lawyer that charges $250 per hour?
How about the way the lawyer uses their time? Did they do nothing else during the 6 hours they billed to the client? They never checked email or got interrupted? Did you know it can take up to 25 minutes to resume a task after being interrupted? Is that factored into the "overcharging" calculation? What if it takes one lawyer one hour to file all the documents for a divorce and it takes another lawyer 4 hours becasue they use no automation and they type every single character into each form? There is no standard measure of time for doing divorce work. When you hire an attornery on an hourly basis, how would a client know if their attorney works efficiently or takes their sweet-ass time with everything they do? The truth is, you wouldn't know unless you compared two lawyer's bills side by side. Isn't the less-efficient lawyer "overcharging" their client?
It is true that a client could pay more under a flat fee agreement than they would under hourly billing. If everything goes absolutely perfect in a case, then the client would probably pay more using flat fees becasue there is some amount of risk built into the total fee. In order to be viable as a business, a law firm cannot accept all of the risk yet receive none of the benefit of their efficiency. There will always be an imperfect outcome if flat fees are compared to hourly billing. The value proposition of flat fees is that the client pays something for the peace of mind of knowing the total cost, or at least understands the actual cost of a course of action before making a decisionon to take that action.
Flat fees disincentivize lawyers.
A common cautionary tale is that someone who pays a flat fee to a lawyer should expect the lawyer to do as little work as possible because they don't get paid for any work over what the flat fee included. This argument has a lot of holes. First, it assumes that lawyers don't care about their clients and only do work if they are being paid for it. Second, it ignores the importance of client satisfaction. Client reviews are possibly the most decisive factor when someone is evaluating attorneys to hire. If you are reading this because you are looking for an attorney, I would be willing to bet you also looked at any reviews you could find for the attorney you plan to hire. A lawyer that was charging a flat fee for a divorce or family law case and doing the bare minimum level of effort would be exposed pretty quickly in their online reviews. All lawyers have an incentive to over-deliver for the client if they want every client to tell their friends how great their attorney is.
Are flat fees for divorce just a marketing gimmick?
Flat fees are here to stay. But, you should always understand how your attorney's fees work. We try to stay on top of pricing trends and understand how other lawyers who offer flat fees structure their services and agreements. Some attorneys that offer flat fees have a lot of caveats and may switch to an hourly fee arrangement if certain events occur. From what we have seen, there are a lot of lawyers that do offer some sort of limited flat fee but it is usually very narrow in scope. Those are the best of both worlds for the lawyer, they benefit if they can complete the case within their cost estimate and they don't have any risk if things become a battle, they just switch to hourly billing. We would call this more of a hybrid fee arrangement than a flat fee. This is a small step in the right direction for legal consumers but protects the attorney if they didn't estimate the cost correctly. This isn't a gimmick, it just further shows that lawyers are a risk-averse breed.
Do I have to pay the whole flat fee upfront?
No. Some clients choose to do this, but we don't require it. We understand that many people don't have enough money saved to pay for their entire divorce upfront. We require an initial payment and a commitment to make ongoing, recurring payments on a weekly or bi-weekly basis, but we also aren't a bank. We will work with clients to try to fit into their budget, but we also aren't a bank and have some limits to our flexibility. Whether you hire us or another attorney, you will need a plan for how you are going to pay your divorce or family law case. Here are some options to think about:
- personal loan (from a bank or credit union)
- credit card
- borrow from family or friends
- Affirm (option to pay over time)
- Divorce Funding - this is offered by Next Chapter Capital, they will work with us to determine if you may be eligible based on the settlement you will receive when the divorce is finalized. This can also be used for living expenses during the divorce. If you own a home and expect to receive some of the equity when the divorce is finalized but don't currently have access to cash, this may be a good option.