More and more lawyers are offering services with flat, affordable rates
An increasing number of attorneys are offering flat-rates for in-demand services. Often times they are willing to do so for things like bankruptcies and divorces. Because these types of cases, are straight-forward in many regards, lawyers are willing to take them on for a set fee. This is very beneficial for clients for a number of reasons.
Many, in recent years, have changed their pricing structures for certain types of cases. Rather than charge clients by the hour for every type of representation, many are offering flat-rate services. For instance, some attorneys will charge a set amount for what are becoming increasingly in-demand areas of law, for instance, bankruptcy and divorce. There are many advantages of doing so, for both the attorney and the client.
The Advantages of Flat-Rate Fees or Packaged Legal Services
For attorneys, flat-rate fees help to bring in business. People that are unable to pay a substantial amount of money to pay for representation, benefit from working with attorneys that offer flat-fee services. Below, we’ll take a look at several advantages of flat-rate fees.
- Such services help control costs
Packaged services help to control costs. An individual knows exactly how much money they will be charged and that they will never be charged anything more. This offers much needed peace of mind.
- Such services allow individuals to accurately budget
It can be difficult, if not impossible, for a person to budget their attorney’s fees if they don’t know how much they will be. When a person is charged by the hour, they have no way of telling how many hours will be required to handle their case. When a lawyer offers a flat fee for a service, an individual knows exactly how much money they will need to set aside. This allows for better planning.
- Such services are cheaper
Packaged services tend to be cheaper, which is why they appeal to people. Many times, they are substantially so. This is great for someone on a budget who can’t handle the uncertainty of being charged hourly, because they don’t’ have a lot of discretionary or extra income.
- Such services save you out-of-pocket costs
Many attorneys will charge out-of-pocket expenses for their services, which add to customers’ bills. Working with a flat rate attorney means you don’t pay for car mileage incurred in reaching the court, or long distance calls made to strengthen the case. Also, the fees already include any research subscription expenses, as well as photocopy fee.
How to Determine the Costs of Flat Rate Attorneys
Now that you’ve aware of the advantages of working with flat rate attorneys, let’s take a look at a framework that lawyers often use to determine how much to charge clients. That’d enable you to keep your expectations real when working with flat rate attorneys.
Consider the value they provide
When it comes to working with a flat rates attorney, the amount to time spent in servicing clients is irrelevant. Instead, you’d need to pay for the value you’ll receive from them. That doesn’t necessarily mean they’ll cost less than an hourly rate attorney. In most cases, the price will be determined by the value you receive in return instead of the time required in solving the case.
Steps to Measuring Value
The most challenging aspect of the above approach is calculating the value you receive from the services provided by a flat rates attorney. There’s no silver bullet where you can simply insert some numbers and carry out the measurement. You have to think on a higher level and look closely at how they provide you the benefit from their relationship. Only then you’ll be able to place a dollar value to the advantages.
Below are a few ways to help you derive value from attorney services or the benefits received from the attorney-client relationship:
- Minimized risks
The objective of most attorney services is to minimize the risks faced by clients. For instance, planning of state allows customers to secure their assets, and attorney contracts allow customers to minimize the threat of facing liability or lawsuits in the future. Hence, risk minimization is one of the unique ways through which customers gain from legal services, so that’s always vital to factor in when doing a rough estimate of the flat fees. The attorney may also provide you with an illustration of how much potential potentialities would damage your financial wellbeing if any of them happen on a practical basis.
- Better income or wealth
Another instance of client gain pertains to financial gains. Though this is usually seen in case of contingency based attorney plans instead of flat fee packages, it is also sometimes applied in transactional law related cases, such as those pertaining to intellectual property and M&A contracts. Hence, it is also one of the most critical considerations to make where it’s applicable, because it is one of the easiest things to track for measuring flat fee costs of attorney services.
- Reduced Liabilities and Expenses
There are attorney services that also help minimize the liabilities facing customers. For example, negotiation cases, tax related issues, or debt minimization in cases of client defense are all instances of how attorney services can minimize the amount owned by the client to another party. It’s also a sort of value that’s easily measurable, in the shape of direct financial gains. So considering factoring it into your calculation of flat fee cost price, where it’s applicable.
- Positive reputation
In specific situations, working with a flat rate attorney can be a primary source of improved reputation or prestige. It’s more applicable to startup organizations in the world of venture capital. Bringing a top tier attorney on board can help these organizations enhance their reputation or make connections in the business world. The attorney’s prestige is another aspect that can lead to a rise in clients’ perceived value, although it’s more challenging to track from a dollar amount.
When you bring the above four factors into consideration, you can make a rough picture of a dollar figure that represents the cost of the attorney services. This is one of the most curicial steps in determining an appropriate fee to pay to a flat fee attorney.
Determining If Flat Fee Investment is a Financially Wise Investment
The next step is to measure whether it’ll make sense to invest in the services of a flat fee attorney. Here’s how you can do that.
Minus gains from costs
In simple terms, your gains need to be hire than the investment, or you won’t gain much out of the contract. Fortunately, gains from legal services are quite high. Imagine winning a house if you’re working with a divorce law attorney. Unlike other options, you can rely on the skills of your attorney to serve his/her clients.
The major cost you’ll need to cover in the form of fee revolve around wages, rent and labor to research the client’s case, as well as any software used to identify the clients’ ongoing case.
It’s fairly challenging to accurately track the costs incurred for taking the legal services. But you can gain a good idea by asking previous clients about how much they paid to the same attorney, and then calculate the average after putting all prices together on the table.
You can also categorize the prices based on the matter at hand, as a few matters require more research and effort than others.
Finding a Balance for Flat Fee Pricing
Once you have a rough idea of how much you’ll gain from the services, and how much you’ll be required to pay the attorney, the last measure is to jot down a balanced flat fee. Balanced means both client and attorney should gain from the relationship.
For the purpose, the flat fee of the attorney service should be a figure that is between the value provided to the customer and the cost incurred by the attorney to provide these services. For instance, if the customer gets about $10,000 worth of financial benefit from the case and the attorney incurs $2,000 in expenses to provide the services, the pricing should be a figure between those two numbers. Hence, both parties can gain from the relationship.
The exact figure would depend on the attorney, but you could always negotiate in the end. That’s where your negotiation skills of the reputation of your startup organization will come into play. If you’ve worked with attorneys in the past, you’ll be able to get a good price.
In Summary
In increasing numbers, lawyers are beginning to offer flat fee services. Packages of this type are often available for divorces and bankruptcies. There are many advantages connected with flat-rate fees. They are generally cheaper than if a person were charged by the hour. They help control costs while allowing people to more accurately budget their attorney’s fees and legal costs.