The greatest reward for a client in working with a value priced fee is the certainty and transparency that occurs. If the fee does not sound right or fair, the client can walk away, or at least can consider the quoted fee to determine if there is enough value to the client to pursue the legal matter in exchange for the fees to be charged.
If a legal representation is quoted at an hourly rate, the client will have little indication of what the final cost will be. In an hourly rate fee there are two components to the final fee, the rate times the time spent on the matter. If the lawyer will not cap the total fee, the client is taking on the risks of trouble. And when the client has paid more than the case may have been worth to the client, and the case is not over, there are no good solutions. Dropping the case does not seem appropriate, after all the sunk costs, and then losing is a hard choice. But pushing on may make no sense either.
The legal matter will determine the number of hours invested by the lawyer, and paid for by the client. Drafting common documents or reviewing documents that have been prepared by another lawyer should be easily estimated. Negotiations on document is not easily estimated due to the nature some lawyer have of arguing every jot and tittle of a document. (One party to a transaction accused the lawyer of spending time grading each other’s documents – which I found in that matter to be pretty perceptive.)
The per hour fee is a measure of some worth, one that for the most part indicates the lawyer’s own sense of self-worth. I think too many lawyers suffer from a lack of self-worth for the real value they provide to clients, and will discuss that more in a future post. For some lawyers it is important to be the highest hourly fee in the community, for others it is critical to not be the highest priced. There are lawyers in our community that are worth more than the fee they currently charge, and others that are not worth the fees they charge. Calculating that on an hourly basis, rather than a case by case basis is not possible.
Is the work being done worth a premium price to the client? If a Yugo does the job for the client, then why should the client pay a Lexus price? But if the client is in a serious legal situation, whether business, estate planning or criminal, a Yugo value legal representation will not accomplish what is needed. And that is true of either a value priced fee or an hourly fee. To some extent, the value of the client’s services are a reflection of the client’s self worth as much as the attorney’s.
There are some good things about hourly fees. It is quoted in bite sized numbers. A three figure number is easier to hear than a four or five figure amount. It can be counted, whether in 3, 6 or 15 minute segments. The sticker shock of how much this problem will cost seems less, if only for a while. And if everything goes well in the case, the number will be smaller than if everything goes wrong in a case.
You may be able to get the lawyer to estimate the number of hours that her experience tells her that this kind of case has taken before. But when you do that, you in essence are asking about the cost of a value priced case.
On several occasions estimating a range of fees (rate x time anticipated for quick results or for slow) resulted in an angry client – when the fee was not the bottom figure quoted in the range. My description of the variables (if we don’t have to file a suit, if the prosecutor takes our offer,. . .) never stuck as firmly as the bottom number of a range of numbers. The client then blamed me for a higher fee, even when I had told him of the variables and put them in the engagement letter, I still seldom collected more than the lower fee. The anger over the fee turned the client from being on the same side as I was, to putting me on another side from my client over the fees. That is not where I want to be in relationship with my client.
If the lawyer is the professional, shouldn’t she show it by setting the fee at a price where the lawyer makes a good living, but the client can live too? More on this later.