Why do you offer flat fees?
We are convinced 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.
Full Transparency: we had a moment of weakness in early 2021 and drifted into hourly billing for a handful of cases. This only reinforced our belief that hourly billing sucks. We hate it and we are awkwardly navigating these cases with clients and will not be offering hourly fees in the future.
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. 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 that 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.
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)
Modern Law (Arizona)
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 that 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 understand what fits best for you and your particular situation.
Stern Perkoski Mendez (Chicago, IL)
Coffman Law Firm (Beaumont, TX)
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 the 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?
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. On the other hand, hourly billing provides absolutely NO incentive for lawyers to do things more efficiently. Efficiency usually translates to a better experience for the client.
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 that 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.
Our firm is built around offering flat fees, and we want to get clients to the best outcome possible, period. Our fee structure ensures we are always on the same team as our clients.
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 of 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
- 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.
- QuickFee - pay in four equal installments with no interest
- personal loan (from a bank or credit union)