We are pleased to announce that we are now offering family law services on an exciting new value based fee pricing structure. This post discusses legal billing generally and my views on alternative billing structures as well as explains the two new types of value based fee pricing structures offered at Smith & Little LLP.
As a lawyer I am passionate about offering my clients value, professional services, integrity, and an ability to get things done. The standard billing model for legal services continues to be the billable hour model, especially in family law. The billable hour is a poor model for both the lawyer and the client. The billable hour rewards the lawyer for inefficiencies and presupposes that the client values the lawyer spending additional time on their file rather than the results accomplished. Why should you pay a junior lawyer on a time spent basis for getting up to speed on the law? Conversely, why should the experienced lawyer be punished for having expertise on the law related to your matter? Presumably as a client you value that knowledge and experience.
My biggest complaint with the billable hour model is that it is very difficult for clients to understand. Clients have a very difficult time anticipating the true amount of legal fees they are incurring as their matter moves forward. I truly believe that when a lawyer tells a client their hourly rate, it has little to no meaning to the client as the client has no idea how to assess how many hours the lawyer might spend on their file. Even among two lawyers charging the same hourly rate, total fees can vary wildly depending on their individual practice styles.
Since founding Smith & Little LLP, Christine and I have been driven to provide sensible and predictable billing practices and policies to our clients. Unlike many law firms, we do not charge for internal photocopies, printing, faxes, or long-distance telephone calls. These may seem like minor details but they can add up to hundreds of dollars on legal bills. We believe in providing our clients value both by providing exceptional service to them and by providing them with reasonable and fair bills.
What we do not believe in is nickel-and-diming our clients and generating profit through alternative business lines such as photocopy services. There are very excellent people in the business of providing photocopy services and we utilize their expertise to offer our clients value. In short, we are a law firm and not a photocopy shop. This is a fundamental belief which sets us apart in the way we do business.
Lawyers have for decades been talking internally about how to abandon the billable hour. However, lawyers as a group are very conservative and reticent to change. It is very easy to continue doing things the way they have always been done even for those of us who believe strongly that the billable hour is inefficient. It has traditionally been seen as very difficult to offer services in family law or litigation on a flat fee basis because these types of files are very unpredictable. Unlike a real estate file where it is easy for the lawyer to assess from the beginning exactly what steps need to be taken and how much time the average file will require to complete, a family law file can veer off in any number of directions and is highly contingent on the cooperation of the opposing party which can be difficult to predict.
We have spent a great deal of time preparing a very detailed value based fee price list and structure in order to offer our clients this alternative billing model on every kind of family law file, especially those which are very difficult, complex, and hard to predict. We believe very strongly that this model is a step towards the future of the legal profession as it provides for the delivery of legal services in a manner that serves our clients and their desire to know what they will pay to be represented.
You may have read my previous post on the topic of the value of representation in family law. As lawyers we spend a lot of time asking ourselves why people would pass up the opportunity to have competent legal representation and choose to take the great risk of representing themselves on such important matters. I believe this trend is partially driven by public perception that lawyers are unaffordable. I choose to believe that most potential clients understand at least in part the professionalism and skills that a lawyer brings to their matter. What they do not understand equally well is the value proposition being offered by the lawyer. As lawyers, this is in large part our fault. Our fees and bills are an opaque black box and we do nothing to illuminate the inside of that box for potential clients who have heard only horror stories of lawyers’ bills leaving their friends and family in endless debt. This is not good enough if we want to continue to serve the public and show potential clients the value that we can offer. While family law files are unpredictable, as an experienced lawyer I have a pretty good idea of how much your fees will be depending on which course your file takes. This is the information imbalance between the lawyer and the client that our new fee structure aims to erase. While the lawyer’s hourly rate has little to no meaning to the client, the lawyer has inside knowledge as to what it usually takes to complete certain steps in the litigation process.
For all of the reasons above Christine and I are very excited to offer our new value based fee services to the public. They bring to the table fairness and transparency for both the firm and the client. We cannot and will never be able to control the actions of an opposing party in a family law file. At the end of the day, if the other party is entrenched in their position and insists on your matter going to trial then your matter will have to go to trial or you will have to concede your position and agree to their demands. What we can do though is tell you from the beginning how much money we are going to charge you for each step in that process and each day that your matter is in trial. We believe strongly in empowering our clients to make informed decisions on all aspects of their matter. This fee structure is a step along that path and will give our clients that crucial information necessary to accurately assess the cost-benefit analysis of continuing along the litigation path or settling at each step of the proceedings.
Smith & Little LLP Value Based Fees Explained
We offer two types of value based fee rates on family law services: a la carte pricing and prix fixe pricing. Our goal is to offer clear, transparent, and predictable pricing despite the complexity of family law cases.
Most clients with complex or unpredictable matters will use a la carte pricing. Our prix fixe options are great for clients who need one particular task completed and appreciate the certainty of a set fee.
A la carte Pricing Model
Each a la carte client will pay an ongoing retainer fee plus flat rates for particular specialized documents and services as they are needed.
Our clients on this plan pay an ongoing retainer fee for each 3 months that their file is active. This fee covers standard ongoing maintenance and supervision of their file and includes standard communication and correspondence on their file as well as up to 3 hours of meeting time with us during each period. We have carefully tailored the included services so that most clients will have their ongoing standard needs met without exceeding these fees. We also recognize that there are times when family law files become very inactive; sometimes due to waiting for a court date or other future event. We do not charge an ongoing retainer fee during such periods of inactivity. Our clients value the predictability and certainty of fees this model offers them.
In addition to ongoing retainer fees, clients pay flat rates for each of the services required on their file beyond standard communications and correspondence. Generally the services for which additional fees are charged are document preparation, financial disclosure preparation, court appearances, and lawyer attendance at settlement or other meetings. These prices are disclosed upfront and our clients can make informed decisions before giving instructions on how to proceed. For example, our clients know exactly how much a court application is going to cost them before deciding whether to bring it.
Prix Fixe Pricing Model
We also offer special prix fixe all-inclusive packages for certain simple and common services. These include such services as uncontested divorces, simple separation agreements, and one and two day trials and family court hearings.
These packages are designed for simple straightforward matters and allow clients predictability in legal fees. There are many exclusions from these packages because they are only suitable for certain limited simple matters. Many of our packages include additional add-on services and fees for matters that are slightly more complex. If you matter does not fit into one of our packages we are pleased to offer you the value offered by our a la carte model. If you start out on a prix fixe package and your matter takes an unexpected turn we will convert your services to the a la carte model. Your fees will be what they would have been had you started with a la carte from the beginning, no hidden penalty.