U.S. Eighth Circuit - The FindLaw 8th Circuit Court of Appeals Opinion Summaries Blog

Alternative Fee Arrangements Key to Client Satisfaction?

As lawyers, we judge one another based on our billable rates. The amount of money a client is willing to pay for our time not only affects how other lawyers view us, it affects how we perceive ourselves. It's a little twisted.

Most BigLaw practitioners accept billable hours at the standard by which lawyers are paid. Accordingly, lawyers spend hours each year refining their days into six-minute increments to quantify their work to clients. Even with that miniscule unit of measure, attorneys are forced to choose between billing tiny tasks and short phone calls for a full six minutes, or giving away their time and falling behind their billable hours. Once the initial months of post-law school idealism pass, most choose to bill the time.

Think your corporate clients don't notice that they are billed for a full six minutes when your phone conversation lasted only three minutes? Think again.

There are, however, alternatives to the standard billable hour:

  • A La Carte Billing Much like items on a menu have a fixed price, services can be offered in the same way. If a client wants the legal equivalent of a side of fries with his or her will, the lawyer can tack the designated fee for the selected service on to the bill.
  • Flat Rate Billing After meeting with a client to determine his or her needs, an attorney can set a flat rate for the project. While flat rates tend to err on the higher end of the pricing spectrum, a client can be confident that the rate will not change and will include all necessary services, regardless of how much time the lawyer spends on the project.
  • Value Billing Whether fixed fees, flat fees, or success fees, value billing allows the client to pay for what the client values most.
  • Value Adjustment Pricing Should you decide that the billable hour remains that most practical option for your practice, you can forge a stronger relationship with your clients by offering a value adjustment line on your invoice. If a client is unhappy with a service provided, the client could propose a payment amount that differs from the invoiced amount.

The most important factor in evaluating billable hour alternatives? Striking a balance that meets both the attorney's and the client's needs.

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