Ways to Pay Your Attorney

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You need an attorney but you cannot afford to pay or need a different way to pay? There are ways known only to the initiated (i.e., those who have asked!). It’s called an “alternative fee agreement” or “alternative fee arrangement” and are only limited by your imagination. As you already know, attorneys typically charge an hourly rate and bill in increments of 1/4 or 1/10 of an hour. Let’s go through a few of the alternatives:

Fee caps: Here, the maximum Hourly billings are capped at a pre-determined level. This can be done for the case in its entirety, for a particular project or service, or for each milestone in litigation reached. I’ve seen clients pay a flat fee for different stages of a case, for example, in cases that require a pre-filing procedure. This arrangement allows clients to set aside a certain amount and budget for the coming expense. You should know, however, that most litigation does not fit this mold. It is way too difficult to predict or control. Most firms would never offer a fixed fee without also demanding full or near full control of the litigation and outcome– and this is often unpalatable to clients.

Fixed fee menus: For firms that offer discrete, well-defined services, this a la carte version of the fixed fee arrangement may be possible. Some examples could include simple bankruptcy filings, uncontested divorces, collection matters, small claims matters, loan documentation, corporate filings, etc. You will often find such fee arrangements with very specialized attorneys or firms who have these niche services ‘dialed in.’

Contingency fee: This is the classic ‘no fee unless we win’ arrangement. It can be done where the client pays costs or not. It often depends on the client’s means and the anticipated costs.

Blended rate: This is the hourly rate arrangement in which the firm charges a single rate for all attorneys working on the case regardless of those attorneys’ ‘regular rates.’ The rate is set in advance or can be calculated by taking the average of all attorneys working on the case.

Reduced hourly rate with kicker or Holdback: In this arrangement, a plaintiff or defendant would pay a lower hourly rate to their attorney with a bonus at the end. This arrangement incentivizes the client to resolve the case early so that they do not continue to incur attorney fees. The attorneys are incentivized to bring the case to resolution as quickly and efficiently as possible so that the ‘kicker’ is preserved. Both client and attorney are then working to quickly resolve the case. This arrangement often works well for defendants but could be used by a plaintiff.

Partial contingencies/Success fees: Similar to a holdback, the attorney gets paid a lower hourly rate and then a bonus at the end if a certain measurable success is achieved. The success measures should be specific, attainable, and clearly identified. There’s nothing worse for clients and counsel to get to the end of the case just to start a new case against each other. One hybrid of this is simply a lower hourly rate with a contingency percentage fee for a ‘win.’

Risk collars: The attorney bills at an hourly rate and provides the client with a budget. As long as the attorney stays in budget, the attorney receives a bonus; if out of budget, the client receives a discount on any additional work required.

Do you have a case that merits an alternative fee arrangement? I have partnered with clients to develop risk-sharing solutions and alternative fee arrangements incorporating several of the above principles. I believe that it has helped my clients to successfully address some of their most pressing personal and business challenges. Each client, each case, and each situation is different. I am willing collaborate with clients to develop tailored alternative fee arrangements to provide the best value and result. Call me.

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