The Flat Fee Society

While lawyers like Patrick Lamb travel around the country preaching alternative fees to the billable hour crowd at civil law firms, criminal defense lawyers chuckle.  We’ve always done flat fees, yet the ABA Journal thinks doing the obvious makes one a Legal Rebel (along with not wearing wingtips).  Naturally, this opens the door to Norm Pattis, who wants his very own Legal Rebel skateboard, to challenge the status quo.

There are cross-cutting incentives in a flat-fee case. The client has paid for a lawyer and wants her expectations, no matter how unreasonable or unnecessary from the perspective of the experienced lawyer’s judgment, met. The lawyer, on the other hand, has an incentive in effectively presenting the case in as efficient and cost-effective manner as possible. Both client and lawyer can err given these conflicting imperatives. A client can demand too much; a lawyer can do too little. Discontent lurks at the periphery of every flat fee case once a black hole opens up, sucking time out of the world as if there were an infinite amount of it to be had.

While Norm’s issue may be real, he’s solving the wrong problem.  The black hole of client demands on a lawyer’s time isn’t a fee issue, but a client management issue.

Although this has been discussed here many times, I’ll recap the rationale for flat fees.  The incentive for criminal defendants to pay their lawyers exists up front, when terror strikes and they realize the need for representation.  Many will happily promise more than they can give.  Many want to pay only for results.  Many have unreasonable demands and expectations.  And some are just criminals, as happy to scam their lawyer as anyone else.  They aren’t amenable to threats or lawsuits; they are bloodless rocks.  Get paid up front or not at all.

The fee is based, as Norm correctly notes, on the lawyers’ experience with cases and anticipation of how much time will be required to handle it.  Then comes Norm’s black hole problem, which is really two wholly separate problems.  On the one hand, there can be a development in a case that removes it so far from the norm that the lawyer could not have anticipated the change, demanding a concurrent change in the amount of time necessary to defend.  On the other hand, there are clients and their families who want the lawyer to hold their hands 24/7. 

With regard to the former, a real change in circumstances, unanticipated and unanticipatable, may call for a discussion with the client and reflect a need to modify the fee.  I say “may” because we always recognize that circumstances aren’t guaranteed to be normal.  There is no such thing as normal, and we know that going in. 

It’s not enough that we just happen to need to work a little harder, a little longer, than our best case scenario.  When that happens, the lawyer should eat his time.  That’s not a real change in circumstances, and the whole point of the flat fee is defeated if it’s only a one way street, always favoring the lawyer.  It’s hard work to be a good lawyer, so suck it up and do your job.

As for hand-holding, a certain amount is almost invariably involved in any defense.  Clients have fair questions, and it’s our job to answer.  Clients need to know about one of the most important things to happen in their lives, and it’s our job to tell them, and explain it to them, and sometimes explain it again.  But we also know that some clients demand more, which is where Norm’s conflict comes in.

There is no good way to charge for legal services, I am persuaded. Clients come in need. They are afraid and angry. They want a hero, a savior, a warrior. You offer them what you can. Most often it is enough. But sometimes it is not. A client grows disenchanted, angry, they want what you cannot give. It is a risky thing to agree to represent a person in crisis. You cannot tell where people will turn in the dark of night. What to charge for this work is a topic about which I am not at peace.

This is where it all goes careening off the tracks and into the abyss.  Lawyers are not psychologists, social workers or the pet dog.  Sure, we understand and we’re empathetic, but that doesn’t change the number of hours in the day.  We can either spend our days doing our jobs, or taking phone calls from depressed, frantic, angry, scared clients.  We can’t do both.  When we fail to recognize this, we get both ourselves and our clients into trouble.  Our days are lost to hand-holding, and our clients are not receiving the representation we owe them because we’re too busy holding hands to do our jobs of defending them.

This isn’t a money issue.  This isn’t about allowing clients to talk to us for hours on end, and then charging them for the empathy.  It’s about making our role clear to our clients, that we are not their therapists but their lawyers.  There are therapists out there, better trained and far more capable of dealing with their moods and feelings than we are, and if the client needs one, we should be the first to point them out.  But we need to similarly appreciate our own limitations.  Most importantly, we need to recognize what our job is, criminal defense.

Others argue that lawyers should be faux-therapists, hand-holders, the pet dog offering unconditional love and support.  They are wrong.  They are both narcissistic, in the sense that they believe they can do it all and are half-capable of providing the therapeutic help some clients need, and weak, in that they lack the fortitude to tell a client when he’s crossed the line. 

Many lawyers never want to do anything that could potentially upset a client, and will suffer endless hours of hand-holding just to keep the client happy.  It’s actually quite ironic that a lawyer, given the ability to put an end to a client’s excessive demands for time by simply telling the client that he can either have the lawyer spend his time defending or hand-holding, but not both, will simultaneously want additional money for showing the love. 

What this really means is that the lawyer wants to take the weight off his back for being the bad guy by being able to say, “hey, ask as many question as you like. The clock is running.”  The fact is that sometimes we have to say enough, manage our clients emotions and expectations so that we can perform our work.  We have no business charging clients for hand-holding, as we have no business holding their hands for too long in the first place.  We’re lawyers.  We defend people accused of crimes.  We are not therapists, no matter how empathetic we want to come off to the client. 

Before closing this post down, Jamison Koehler has chimed in, and Brian Gurwitz adds his two cents in the comments to Jamison’s post.  Combining their experience as criminal defense lawyers together, they’ve been at this about 47 minutes. 

For me, without Pattis’ vast experience, the jury is still out.  Yes, the hourly rate does offer many advantages.  It assures that the lawyer is compensated for every hour he or she spends working on the case.  And it prevents the client from paying for hours the lawyer has not devoted to the case.

No, no, no.  It does nothing of the sort. Hourly billing is one of the most notorious scams going, where a lawyer puts down a tenth of an hour (6 minutes) because the client’s name passed his lips, or charges for 12.7 hours for preparing motions when most of the time was spent playing spider solitaire as he pondered the issues.  The same issues, that the client has no clue what the lawyer does except in court, exist, and create the pretense of transparency without any reality. 

At the same time, based on what I know now, I still prefer the flat fee, at least for the type of cases I currently handle.  The flat fee allows the client and me to deal with the money issues upfront and then to put them behind us, without the continuing distraction.

Distraction?  It’s hardly a distraction, but an outright war when there’s a money dispute in the middle of a defense.  Norm fears a conflict?  This is a conflict, the lawyer fighting with his own client over money in the midst of battle.  What Jamison should also note is that he’s paid, as opposed to his client sheepishly telling him, “I know, but I don’t have any more money.”

Jamison says that fees are different for street crime, which is the type of practice he has, and “white collar.”  It’s not so much that the fees are different, as that corporate/financial crime defendants are susceptible to being billed on an hourly basis, as they are more likely to have assets that can secure payment of the fees and are used to paying monthly bills.  It’s got nothing to do with nature of the crime, and frankly most defendants accused of corporate/financial crimes would do far better with flat fees.

The last note to be made is that I haven’t distinguished between true flat fees and hybrid flat fees, with a fixed price for various stages of the proceeding.  I use the hybrid because I consider it inappropriate to charge for work when there’s no clue whether it will be necessary.  This means that there’s a risk of nonpayment when trial comes around, but dealing with that is an issue for another time. 

I raise this only to offer a thought to any defendant who is charged a straight flat fee for a case, soup to nuts.  Take the fee and divide it by a reasonable hourly rate that will cover costs, fixed and variable, and leave a few shekels over to buy the kids new shoes.  How many hours do you get?  If there aren’t enough to cover the time to get to trial and then try the case, guess what you’re not getting. 

Forget about hand-holding. That lawyer has no plans to do anything beyond pleading you guilty the first chance he gets.

12 thoughts on “The Flat Fee Society

  1. Jamison

    47 minutes of experience as a criminal defense lawyer? That was yesterday. Today it is 48 minutes.

    Good post. In saying that “[h]ourly billing is one of the most notorious scams going,” aren’t you making certain assumptions about the lawyer who is doing the billing? And if, isn’t the problem with the lawyer and not the billing formula?

  2. SHG

    Excuse me, Mr. Experience. As for the billable hour, there are some very limited assumptions involved, based upon the way it’s nearly univerally used.  There’s nothing to stop a lawyer from billing in 10 second increments, but nobody does.  It’s invariably billed in 6 minute increments, even if the time involved is 10 second to read an email that says “thanks”.   What about the 3 hours spent on a motion, when there were 7 short duration phone calls in the middle, a few emails and the copy machine broke down?  Nothing forces the lawyer to be imprecise, yet it ends up billing out at 4.3 hours.

    The flip side is that you don’t want to bill the client for 3 hours of just thinking about his case to try to come up with a viable defense when confronted with bad evidence.  Do you not bill, end up with a fight on your hands or just not do the hard labor of thinking?

    It’s fraught with problems, even though hourly billing, like most ideas in a vacuum, seems like a magic solution.

    And then there’s the problem with not getting paid, fighting over bills (how could you spend 27 hours doing research?), maxing out the client’s wherewithal or reaching the point where the cost/benefit breaks down, even though you believe that more work needs to be done to provide a zealous defense?

  3. Norm Pattis

    S:

    Love you and read you often. But what the fuck is a legal rebel skateboard? And do you really care what the ABA thinks? Shame on you.

    N

  4. SHG

     

    Don’t be so quick to judge me, old man.  I’ve got other nipples to tweak in that post besides yours.

    What lawyer wouldn’t look like cool on a ABA Legal Rebel skateboard of his very own?

  5. SHG

    Not flat fees per se. but non-refundable flat fees that would inhibit a defendant’s ability to discharge his lawyer and get a refund of the unused portion of the fees.  In the old days, the typical arrangement was a nonrefundable flat fee.  Now it has to be refundable, though no one has explained how exactly one determines what portion of the fee has to be returned at what stage of the proceedings.

  6. pamela Byrne

    Hah. After a three day robbery trial, the jury came back with a (rather astonishing) acquittal. The client immediately asked for his flat fee payment back on the grounds . . . well, I never quite understood his grounds. Sort of, ‘they said I didn’t do it and why should I have to pay you a dime if I’m innocent. It’s just not fair.’ Then he and his family thanked the Lord for the acquittal. I evidently had nothing to do with it.

    Can you imagine if I hadn’t demanded my money up front? Weeks of work for nada.

  7. SHG

    It’s only our fault when we lose. When we win, it’s either because they were innocent anyway or God intervened.

  8. The Notwithstanding Blog

    Around the Mediverse: July 8, 2010

    Fun tidbits, health-related and otherwise, from around the ‘tubes: OpenTable for physicians?  It does exist, apparently.  Be sure to click the link for HelloHealth to find out how that firm is bringing the power of the Internet to enhance patient care….

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