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Client Choice: Flat Fee vs. Hourly Rates

There are many advantages and disadvantages to flat fee representation. The advantages include knowing the total cost in advance (which allows for better planning), understanding the full commitment at the beginning of the representation, and a resulting likely reduction in client stress. Because of these advantages many attorneys are pitching the fixed fee model as a revolution in client billing.

The problem with this revolution, though, is that firms that are switching to fixed fee billing are making the same mistake that the traditional hourly billing model makes. These firms are assuming that they know what is best for their clients.

I often tell my clients that they set the goals, and my job is to tell them whether I can meet those goals or not. If I think we can meet the goals, then my job is to use my knowledge of the court process and negotiation to try to reach those goals. In the same way that I do not believe that I can set a client's goals for them in a case, I don't think that I should set their financial goals for them either.

The main disadvantage of flat fee billing is that both the attorney and the client take a risk. If the client refuses to settle the case, or the other party refuses to settle, and the case is litigated, the attorney will likely spend more time than they assumed when quoting the fixed fee. The attorney can accept this risk because they represent multiple clients and the cases that settle quickly will outweigh these cases. The client's risk, however, is that the flat fee is more than they would have spent if their case settles quickly. The client's gain is the settlement, but they do not recover for this risk in other areas of their finances. The law of averages favors the attorneys.

Do the disadvantages outweigh the advantages? Isn't that for the clients to decide? After all, it's their money. That is why at Kelsey & Trask, P.C. we offer both hourly rate representation and flat fee billing. Call us for a free one hour consultation at (508) 655-5980 and let us know if you are interested in a flat fee quote or hourly rate billing (or learn about both options).

What is LAR and why you should care!

Limited Assistance Represetation (also called "unbundling" or "LAR") is a program that allows a lawyer to provide partial services to a client, limiting the attorney's representation to only a specific matter while the client mangages the remainder of the case. On May 1, 2009, the Supreme Judicial Court issued a press release that LAR is now permitted in all trial court departments in Massachusetts.

In Famly Law, this often means that the lawyer either assists in the preparation of court pleadings, but doesn't go to court, or agrees to only go to court for specific events. Limiting services in this way allows for greater predictability in the amount of time an attorney might spend working on your case. This predictability allows us to provide a flat fee for many family law related services.

The LAR program is an exception to the normal rules, in which attorneys file unlimited appearances and "ghostwriting" is frowned upon. Under the LAR program, "ghostwriting" (writing pleadings on behalf of a client who will present them without counsel) and limited appearances are permitted by the Supreme Judicial Court to give more parties the opportunity to have legal advice even if they cannot afford an attorney for their whole case.

The program requires that attorneys participate in a training for LAR in order to be eligible to provide these limited services. Attorney Kelsey participated in the required LAR training at the Norfolk Probate & Family Court, when LAR was only a pilot program, before it was expanded in May 2009, and is therefore certified to practice LAR. Contact us for a free one hour initial consultation to learn more about LAR and the flat fee services that we offer.

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