Solos discuss alternatives to the billable hour

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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,, which recently posted an article about the creative cost of legal work as opposed to the time spent on the work.


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  1. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  2. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  3. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.

  4. rensselaer imdiana is doing same thing to children from the judge to attorney and dfs staff they need to be investigated as well

  5. Sex offenders are victims twice, once when they are molested as kids, and again when they repeat the behavior, you never see money spent on helping them do you. That's why this circle continues