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Alternative Fee Arrangements Key to Client Satisfaction?

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By Robyn Hagan Cain on September 29, 2011 10:11 AM

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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