Litigation

Hourly Billing in Personal Injury Cases

Personal injury clients expect their lawyers to diligently handle their claim, turn over every stone that there is to turn, and remain in constant and concise communication with them about their case. The problem with hourly clients in personal injury cases is that they don't want to pay for it.If you are handling a plaintiff's personal injury case on an hourly fee basis, the first question you have to ask yourself is why? As borne out by a recent study, people who prefer contingency fee agreements even if it meant they were ultimately likely to pay more in fees. In fact, affluent trial lawyers were also included in the experiment as imaginary plaintiffs, and they too chose the contingency fee agreement over the hourly billing rate. Besides being risk adverse, most clients prefer a contingency fee arrangement because it makes sense. In any business relationship, if you are able to forge a deal where the parties are working with vested interests, you are better off. The personal injury lawyer-client relationship is one of the cases where the parties' interests line up well. Moreover, the contingency fee preference is also because it is less stressful for the client to have some degree of cost certainty. Few people like paying anyone by the hour, especially when it is hard to know how many hours will need to be expended. Most of us would rather just be given an all inclusive price to solve the problem, in any context and, particularly for personal injury victims. In light of the overwhelming logic of a contingency fee arrangement in a personal injury case, that brings us back to the question of why an hourly fee. The usual reason is the attorney has requested an hourly fee because the lawyer does not believe in the case. Almost invariably implicit in this is that the lawyer believes that claim will not benefit the client. If this is the reason for the hourly arrangement, you should not take the case. If you do not think you will achieve a successful outcome for the client, you should not be involved in the case. If it is the client that desires an hourly fee arrangement, you have to question that as well. That client is choosing a path the client thinks is going to save him money. This means you have a very cost conscious client. There is nothing inherently wrong with this. But if the client is proven wrong and the fees are higher under an hourly arrangement, the client may not concede the hourly way was the wrong way to go; instead, they may point the blame right back to you for over billing, spending your time needlessly, and so forth. In summary, hourly billing is rarely the best approach. If you have an exceptional case that you think warrants an hourly billing arrangement (or you ignore this advice), here a few thoughts:1. Obviously, you cannot know exactly what each task will cost at the outset of a case or what the final cost will be, particuarly medical malpractice or complex product liability cases. Still, you will likely be asked to make an estimate for various tasks and your overall fee. If you try to set expectations too low to make sure you get the case, you are likely going to find yourself in trouble. "Underpromise and overdeliver" should be your motto.2. Get approval for anything that would not be legal malpractice to not do.3. Document everything and make sure your time sheets are clearly detail the work that you have done.

Full post as published by Trial Lawyer Resource Center on March 26, 2008 (boomark / email).