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What are Fixed Fees? 2017-06-27T17:40:27+00:00

What are Fixed Fees?

  • With fixed fees you know the price in advance – with hourly-based fees you don’t
  • The traditional way to bill clients is on an hourly basis for managing every aspect of the case – with fixed fees you can pick and choose the services you need
  • Lawyers have trouble estimating a profitable “fixed fee” and don’t like using them because:
    • That’s not the way it’s been done in the past,
    • They feel they can’t reasonably estimate the amount of time they’ll take to do a job because some clients are easier to work with than others, they can’t tell how cooperative or dificult the other side will be, and they don’t have control over court schedules, etc., etc.
  • Fixed fees places the responsibility for a “cost over run” on them instead of the client

Moving to fixed fees requires fresh thinking.

Check out The Family Law Coach’s fixed fee services

Fixed fees vs. hourly-based fees

Fixed fee services are a new way to provide legal support to self-reps. With a fixed fee service, the price you pay is set in advance. It’s like buying a shirt or a TV. There’s a price tag so you know the full cost in advance. You can decide for yourself if you can afford the cost, and if the cost is worth the service, before you make the decision to buy.

For almost all family law services, there’s no price tag to look at in advance. Lawyers can tell you their hourly rate, but not the number of hours to do the job. You never know the total price until the whole process is complete. And you can run out of money before getting to the end.

With an hourly-based fee structure, the lawyer adds up whatever time it took to do the job, multiplies that by the hourly rate, and arrives at the price. You’re charged for time spent on your file whether or not the matter moves forward. With an hourly-based fee arrangement there’s no incentive for the lawyer to get the job done efficiently because the longer it takes, the higher the fee. Lawyers are generally paid based upon the number of billable hours they docket. No one asks if the fee charged was worth the service delivered.

But with a fixed fee, the lawyer sets a price based on work they’ve agreed to do. It’s based on the value to you, the customer, not the cost to deliver it. And it also outlines what work will be done for that fee in advance. With a fixed fee service, you get just the service you agreed to get at the price agreed upon before you buy it.

The problem

Family law lawyers have always charged by the hour. That’s the way young lawyers are taught, because that’s the only way it’s done. And generally, lawyers are paid by the number of billable hours they charge to a file.

Chatting on the phone with the other lawyer about the kids before getting to business adds to the cost. The time the lawyer spends waiting in the courtroom for your matter to be called adds to the fee, as does the time it takes to get to and from court. The lawyers’ administrative tasks adds to the cost. There’s no incentive to finding cost effective ways to do things.

Most lawyers are afraid to change a fixed feed because they don’t know how long a job will take, or what complications will crop up. And they can’t control how cooperative the other party or their lawyer will be in handling the file. So lawyers don’t offer fixed fees. They understand the problems with the hourly-based model, but it has worked for centuries and made everyone money, so why change?

Fixed fees requires a fresh approach

To charge a fixed fee requires that the lawyer take a fresh and creative approach to delivering legal services. She needs to figure out what services can and can’t be “packaged”, so that a fixed fee will work. And she needs to set a price so the package will be of value to you. This can’t be done for all legal services.

Providing fixed fee services also requires the lawyer to look at the delivery of legal services from the viewpoint of the customer. This means creating and developing off the shelf, à la carte, predefined, services at prices that are attractive to the user. That’s tough to do if you’ve never done it before.

“Customers” or “consumers” are different from “clients”. Customers tell businesses what they need and what they’re prepared to pay for it. They can choose between a Chevrolet Spark, now priced at under $10,000, or a Mercedes. They can choose between shopping for clothes at Walmart and Winners, or at Holt Renfrew and Harry Rosen. It’s up to the provider to see if they can create a service the consumer wants to pay for.

For practical purposes, fixed fee services require that a lawyer starts thinking like a businessman, focused on what the customer wants. And it also requires lawyers to reconsider how to deliver services in a digital age where you can buy everything else on-line, not just how to charge for them.

Unbundled services are only part of the answer

We’re beginning to see some family law lawyers saying that they offer unbundled services. Unbundled services is a way you can hire a lawyer to do just a slice of what they normally do on a full retainer. This most often means you meet with the lawyer, work out the service you want them to perform, and they agree to do it based upon their hourly rate. It’s still an hourly-based service.

Some lawyers will set a cap on the fee so that, at least, you know the fee won’t be more than that figure. Others will estimate the “average” time to do the job and then add a buffer to take unexpected circumstances into consideration before giving out a figure. But in each case, the fee is pretty high and doesn’t reflect a reduction in the amount charged if the job gets done faster.

Where can you find affordable fixed fee services?

Because very few lawyers set services and fix fees in advance, you need to ask around. Check with friends and family to see if they know of such a family law lawyer. At the time you make the appointment for your first consultation, ask if the lawyer will offer a fixed fee.

When you meet with the lawyer, ask about a fixed fee before you get started. Get him or her to set out in writing what they’ll do and what they’ll charge. And then go to another lawyer with the same request. This way you can compare costs before you begin.

If you find a lawyer – or family law mediator, therapist, or coach – who offers real fixed fee services, let us know. We want others to know about them. We’d like to add them to The Family Law Coach Providers Directory, a listing of people offering services to self-reps, including 3 Pillar services.

And of course, you can find the various fixed fee services offered by The Family Law Coach.

See Our Services

 

 

Check out The Family Law Coach 3 Pillars of Self-rep Services

Not all unbundled services are suitable for every self-rep. The Family Law Coach developed what we call the 3 Pillars of Self-rep Service to provide more affordable and targeted services, and to ensure that those services could be accessible, on-line, by anyone from anywhere. A 3 Pillar service is:

  1. Defined:
    The service must be defined in advance with an accurate description of what’s included before you buy.
  2. Fixed fees:
    The service must have a fixed fee that will be set, or a stated range that will be capped, before you buy.
  3. Accessible:
    The service must be available to anyone, anywhere in Ontario, by Internet or phone.

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