There is an interesting article in the Wall Street Journal, today, discussing how fixed-fee arrangements, versus billable hours, are becoming more prevalent in law. This is one area that used to really bother me, when I was practicing law on a daily basis. The billable hours in the legal system encourages waste. It fosters inefficiency. And, it does not serve the needs of clients.
OK, this post may hit to close to home for some of the lawyers who read this blog. If you are one of them, you are saying right now “well, I don’t know how long ‘X’ will take.” That is true in some cases. I can’t say, “Ma’am, I will defend you in this car wreck… we will proceed to litigation… and your fee for my representation will be X.” That simply will not work. There are way too many factors involved.
However, that is only a portion of the work that lawyers undertake. Take, for example, a Will. In recent months, I have heard two examples of attorneys, who (in my humble opinion) over-charged big-time, on a Will. This is a task of nearly monotonous proportions. In case you need to get a Will done, this is what will happen. A lawyer will meet with you. He will (hopefully) find out about your family, your economic situation, etc… who you want to pass your estate onto… and, then, he will use a template of a Will he has done for someone else in the past. His Paralegal will CTRL+F and find every mention of that person’s name. Then, he will replace it with your name. Then, he will change the will to account for the changes that you wanted. And, voila, it is done!
Now, unless it is a VERY complex estate, a fixed-fee arrangement would be valuable in this situation. A lawyer could fairly and accurately estimate how long it would take him to complete this task. There is no need for a billable hours arrangement that only incentivizes a lawyer to drag a process out.
Another example …. Setting up an LLC. I know lawyers that do a billable hours arrangement for this type of work… once again… you could use a fixed-fee arrangement, in this situation. Let me tell you, yet again, what a lawyer will do in setting up an LLC. He will use a template form for the “Articles of Organization” that you could download from the Tennessee Secretary of State’s website. Then, he will use a template for an “Operating Agreement” (optional in Tennessee – but, I would advise in favor of it, highly!). He will use these templates and forms that have been created in the past to bring your LLC into being.
I think that people have a misconception about what attorneys do on their behalf. They think that there is a lot of “legal hokus pokus”, but, the bottom line is – in many cases – they are using templates. And, in many cases, attorneys are billing hours when they could be offering a fixed fee for work. Think about how more client friendly it would be if you could walk into your lawyer’s office – and he would say “you want this done. I will charge you X”. It makes the legal system more accessible. If you knew you could get a will done for $335 rather than for “I’ll bill you when I am done”, would you be more or less likely to get that Will done? Personally, as a consumer, I would fear going in to have a basic legal procedure done (without knowing the cost) and walking away with a HUGE bill. More predictability is needed to make the legal system more accessible to all.
As attorneys, we should all be shooting for the goal of making the legal system more accessible to all. Part of making the system more accessible is re-thinking the fee structure to make it more consumer-friendly. And, yes, before you start commenting, once again, I realize that some work cannot be undertaken on this basis. But, some can. And, for that work, we need to stop fostering a system that rewards inefficiency and dragging matters out. Doing so does little to foster the goal of making the legal system accessible to all.
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