Flat Fee v. The Billable Hour: The Debate Continues

My dialogue with Ben Stevens on the merits of billable hour versus the flat fee in a matrimonial action continues.

Let me say at the outset, that I am certainly no fan of the billable hour. For many reasons, I  prefer the flat fee model. The number one reason, it is predictable. With certainty, I can answer the question every client asks, “How much will this matter cost?” When billing on an hourly basis, I can only estimate, giving a meaningless range.

As pointed out in The Billable Hour: Are its Days Numbered, a flat fee may work on more routine stuff, high-volume work or repeat work, but not on “bet the farm work.”  Certainly, a flat fee arrangement lends itself to an uncontested divorce or the negotiation or review of simple marital agreement.

But does the flat fee really lend itself to an emotionally charged and litigated divorce or custody action? Mr. Stevens states that because he charges his client’s a flat fee he is selective in his case selection, agreeing to represent clients, who, for instance are reasonable in their expectations. That, however, is only half the equation. It takes two parties to reach an agreement. What happens if the other party or legal counsel is not acting reasonably?

Mr. Stevens also contends that the billable hour rewards inefficiency and waste. That statement would be true if one were looking to make a “killing” on a single client. I prefer to treat my clients fairly and build my practice by referrals. A client, who feels that he was treated fairly, is the absolute best source of new business. For this reason, it would be shortsighted to invoice a client for needless work or excessive time charges. .

Regardless, I will accept Mr. Stevens challenge and will accept, at least, one new litigated case on a flat fee basis. I will report my thoughts here. Stay tuned.

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