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Constructing a Flexible Fixed-Fee Project

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By William Vogeler, Esq. on October 30, 2017 3:58 PM

Law firms are looking everywhere for alternative fee agreements that work.

Flat fee, hybrid fee, premium fee, break-up fee, budgeted fee; the list goes on. Some firms won't even work for money where bitcoin will do.

Here's something a little old and a little new: the project fee with a construction feature. In the construction business, they call it a "change order."

Project Work

Project work is based on a fixed fee agreement. Clients like it because they know in advance how much their legal fees will be.

Some firms "back into" the price by staffing the project after the fee has been fixed. They may outsource or assign tasks to workers to ensure the project stays on budget.

But sometimes the project takes a left turn, or the client wants to pursue another course. That's where the change order comes in.

"The inevitable 'unexpected turns' a matter can take -- many of which are predictable -- can, if they truly are 'unforeseeable,' be subject to a change order written into the Statement of Work/Engagement Letter," says Mark A. Cohen for Legal Mosaic.

Change Order

It is like a change order in a construction project. A homeowner and a builder, for example, sign a change order to specify a room addition.

It is basically an amendment to the original contract. Email or other written authorizations can work, but it has to be clear that it changes the work requested and the fee structure.

Construction lawyers know that change orders can be the focus of litigation, too. But those cases turn out better when the parties have clear, written change orders.

For attorneys seeking fee alternatives, they work best when clients know they have some control over the amount. It starts with clear agreements on fees and the scope of the work.

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