Family Law

Benefits of Flat Fees in Contested Divorces

By Dan Nunley, Esq.

While many attorneys offer flat fees for uncontested divorces, very few are willing to represent a client in a contested divorce for a flat fee. Why is that when there certainly are benefits to both the lawyer and the client from a flat fee arrangement?

I feel safe in saying that the vast majority of clients would prefer to pay a flat fee rather than an hourly fee, simply for the benefit of knowing exactly how much they will be paying out of pocket for divorce representation. Like any other purchase of goods or services, people want to know "how much is this going to end up costing me when everything is said and done?"

Most attorneys justify their unwillingness to accept a contested divorce for a flat fee by stating that they are unable to predict just how much of their time will be necessary in a specific case. There is some validity to this position, as the time necessary to resolve two seemingly similar factual cases can be drastically different. The difference in time invested in the two cases is greatly affected by the specific individuals involved in the case, from the parties, to the opposing counsel, to the judge.

And while the law is a profession, it also is a business. If an attorney doesn't make money practicing law, he/she won't be practicing law for very long. Therefore, the safe thing is to simply bill the client for the actual time the attorney spends on the case. What could be more fair than that?

Well, I believe that from a client service standpoint, the flat fee arrangement is more client friendly and puts the burden on the professional where it belongs.

One of the biggest potential problems with the billable hour system is that it doesn't encourage an attorney to be efficient. Clearly, an attorney who is billing by the hour makes money in direct proportion to the amount of time spent on any given task. I'm not suggesting that most attorneys who bill by the hour drag their feet and pad their bills, however the temptation is certainly there.

On the other hand, an attorney being paid a flat fee has an incentive to not waste time and get the case resolved as quickly as possible.

Billable hour proponents may suggest that a flat fee arrangement could encourage an attorney to cut corners and rush a case through since the less time the attorney spends on the case, the more profit he realizes. However, if the client is careful in his selection of an attorney this shouldn't be a concern since the attorney is bound to abide by certain legal ethics, such as those required by the Oklahoma Rules of Professional Conduct.

It's easy to understand why a client may feel that he is writing a blank check to an attorney who bills by the hour. There's no cap on how high the bill could go. And if the attorney can't predict how much of his time will be required, the client is left with only a growing apprehension of mushrooming legal fees. On the other hand, when an attorney and client agree to a fixed fee for legal services, the client can plan and budget since he knows exactly how much he will be out of pocket.

Additionally, a client's willingness to pay a flat fee means that the lawyer's services are worth that specific amount to the client and therefore fee disputes are far less likely than in the billable hour scenario. Both the lawyer and the client benefit from the reduced likelihood of fee disputes.

Lastly, if my unscientific polling is the least bit accurate, most attorneys detest tracking their time for the purpose of hourly billing. Truth be told, tracking and billing time and collecting payment is a time intensive, stress-inducing activity for most attorneys. However, the attorney who charges a flat fee and obtains the flat fee in advance of representation can avoid the hassles of time tracking, monthly billing and collecting his earned fee. This will free free up hours of an attorney's time in which he can be more productive and less stressed.

More to come on this topic tomorrow.

Full post as published by Oklahoma Family Law Blog on December 10, 2007 (boomark / email).