ILNews

Solos discuss alternatives to the billable hour

Back to TopCommentsE-mailPrintBookmark and Share
Indiana Lawyer Focus

This story has been corrected.

While alternative billing isn't a brand new concept, more solo and small firm attorneys are offering this option to clients to help develop their businesses as clients are more likely to ask their lawyers the question: "What do I get for paying you for your time?"

Three solo practitioners shared with Indiana Lawyer their experiences as to how alternative billing has helped their practices - and how to avoid ethical and financial pitfalls.

Jennifer Ruby, a solo in Indianapolis, offers clients an estate-planning package, with one rate for single clients and another for couples.

To get clients started, she said, she has a list of various services and the costs for each one to see what they are saving if they agree to a package deal. Clients also can choose only the services they need, especially in the case of clients who are terminally ill.

In situations when her hourly rate would cost less than the time actually spent on the package, she will charge the client her hourly rate.

"I do it the way I do because I feel like people who've never gone through the process or don't understand the need for having power of attorney or a will need a lot of education as to why they need to have those documents," she said.

"This is especially the case for young couples who haven't given a lot of thought into who's going to get their stuff, or if something happens to them and they have kids, who will get guardianship," she added.

Ruby also represents small businesses, but continues to bill those clients by the hour - unless she thinks what she's telling them is something they can get for free on the Secretary of State's Web site or elsewhere. In those situations, she may help the client find the right forms, but not bill the client her regular rate for her time.

She does this with the hope they will eventually come back to her when they do need to pay for legal advice, or they will refer friends to her.

Fort Wayne attorney Douglas Powers also offers alternative billing to clients. He was previously with Baker & Daniels for 18 years before going solo about five years ago. He said the billing alternatives have been a matter of trial and error. While at the larger firm, he said he wasn't the one who dealt with billing, so he's been learning as he goes.

One of the most complicated issues about not billing by the hourr is not only knowing how much to bill a client, but also how to keep that client happy by not overcharging, at least in tthe client's mind, while also not undervaluing the service in order to pay bills and maintain a viable practice.

He said he took some risks early on, but being a solo has helped him come up with solutions "on the fly" because he doesn't need to get approval from a committee like he would if he was working for a big firm.

For example, in employee benefits cases he represents, he said he can charge a flat fee if it's something he's already dealt with enough to know what it will likely cost.

He has also representted business disputes where the time spent and outcome were unknown at the beginning. For that kind of case, he has discussed fee options with the client that included a retainer fee. He and the client then agreed on a reasonable monthly fee and what that would include. Then, instead of asking for a third of the contingency, which he said is typical for this kind of case, he would ask for less, such as a fourth of the contingency.

However, his monthly fee would be credited toward the contingency amount he would be owed.

"So if after a year the client has paid $12,000 in monthly fees and I recover $25,000, I get a check for $13,000. And if no contingency is recovered, I keep the monthly payments as a way of sharing the risk," he said.

Ted Waggoner, managing partner of four-person firm Peterson & Waggoner in Rochester, is another proponent of alternative legal billing. He has written about the subject for national publications, including the American Bar Association Journal.

He tells his clients about different scenarios and how the fees will reflect those scenarios. To do this, he said his firm will sometimes use graphs to explain the costs - and discounts - if their legal needs go beyond the scope of the most basic situation he as the lawyer expects can happen. He will also explain the probability of different scenarios and what that could cost.

All three attorneys agreed that having an engagement letter is key to making sure the client is aware of the arrangement early on.

Waggoner added this is important for ethical reasons and to possibly address early on what happens if a client pays a lawyer for a service, but then changes counsel before that service is completed.

All three attorneys also agreed that for any lawyer considering alternative billing, it is vital to keep communication open with the client at all times, and to put the fee agreement in an engagement letter up front. They also agreed that if clients preferred hourly billing, they would honor that.

But having an alternative fee arrangement, Waggoner said, "puts you and your client on the same side of the transaction. The attorney does more research because their ethics provoke them to get the right answer for the client, but not unnecessary research if they have nothing better to do than bill the client a few hours. ... The client is able to budget for the fees, and is able to determine if the client values the case as much as the attorney does."

To get started, Powers read up on alternative billing, including a number of books by the ABA and other national legal organizations.

Waggoner suggested the Web site, http://www.clientrevolution.com/, which recently posted an article about the creative cost of legal work as opposed to the time spent on the work.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  3. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

ADVERTISEMENT