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For Your Business Legal Needs, Think Beyond the Billable Hour

Jessica Bednarz March 26, 2019

I made a few New Year’s resolutions this year: introduce a spin class to my workout plan, seek out more organic ways to meet potential partners, and maximize the use of my vacation time. While these goals may be commendable, I don’t think anyone would describe them as life-changing, at least not on their face.

Life changing decisions are exciting. But they are also just that: life changing. For such important decisions, it is important to take time to consciously do due diligence and execute your plan with precision—to be conscious and behave as a responsible adult.

Due diligence should include consulting with a lawyer. You may think that lawyers are expensive, right? (Right.) And they’re nearly impossible to budget for because too often they ask to be paid by the hour. They typically offer a one-size-fits-all option: a high-priced hourly rate and no estimation of how long it will take to meet your goal.

A growing trend among modern lawyers gives consumers better choices when it comes to purchasing legal services. Over the past ten years, socially conscious legal incubators and initiatives have sprouted up around the country to train lawyers on pricing their services based on value instead of time and offering predictable, flexible, and affordable legal solutions to everyday people and small businesses.

Choices beyond the traditional billable hour

Traditionally, if you had a legal problem or question, you would call up a lawyer and be quoted the hourly rate the lawyer would then charge for each hour of time they spent working on your matter (e.g., $250, $600, or even $1,000 or more per hour). The lawyer and his or her team would not provide the total cost up front, nor would they estimate the amount of time they expected to spend. The line typically goes something like, “There is no way I can give you a quote because every case is different and involves too many variables.” While there is some truth there, it is also true that many other companies in other industries face similar challenges around variability but still find ways to estimate the total costs. If airlines can definitively determine their prices, lawyers can too—and some modern lawyers are doing just that.

Instead of lawyers selling time and using a model that rewards inefficiency and uncertainty, modern lawyers present you with predictably-priced legal solutions that reward efficiency and provide more certainty.

Flat fees: It may be that you need to file formation documents and create an operating agreement. Rather than giving the nebulous hourly rate, some modern lawyers will quote you a flat fee to prepare it. That is, a single amount that covers the needed documents. An experienced lawyer can ascertain the level of complexity and predict challenges so the lawyer can set a fixed fee for certain services.

Fixed subscriptions: As a business matures, you will need a lawyer to complete new tasks as you need them. In some situations, lawyers offer a fixed monthly subscription pricing model to meet the business’s goals. For $200, $750, or $2,000 a month, the lawyer agrees to be available for whatever legal needs arise. The business can predictably budget for its legal fees.

Contingency fees: Another example of a predictable pricing model is a contingency fee. A contingency fee means that a lawyer earns a percentage of the award or settlement or a percentage of the money the client saves. Contingency fees are common in personal injury cases and sometimes in debt collection cases. State laws may restrict their availability. (For example, they’re forbidden in family law cases in some places.)

Value-based fees: A value-based fee is based on performance. Perhaps the lawyer offers a specific expertise that can save the company millions of dollars. Hourly billing may not recognize the worth of the lawyer’s knowledge.

Other examples: The type of matter you have affects what is ethically and practically possible for lawyers. A dispute over $100 may be important in principle, but not worth the time or resources to pursue it. Fee shifting is a possibility in cases where a statute says that the lawyer’s fees are paid by another party (and the evidence is strong).

Modern lawyers not only provide predictable pricing but can also customize solutions, if the full package of services is out of your budget. When a case is not overly complex and the consumer is capable of handling parts on their own, they can hire a lawyer to help where the lawyer’s help is most needed. For example, if you need to get divorced but you can’t afford (or don’t want) a lawyer to work on the entire case, you could instead pay the lawyer to only work on certain parts like drafting an agreement or going to court while you handle the rest. Sometimes you just want a lawyer to give you advice while you go to small claims court. Lawyers refer to this customized approach as “unbundled,” “limited scope,” or “flexible” services.

How to find lawyers willing to use alternatives to hourly billing

In any other industry, a search for the product or service you need would return a plethora of results, including the price and where you can buy it. Sadly, a similar search for legal services is often less fruitful thanks to the profession’s aversion to change and its archaic ethics rules. While traditional lawyers and their rules initially were intended to protect the consumer, they now seem to have the opposite effect. And while the number of modern lawyers increases by the day, their totality is still fairly small, so it can be challenging to find one if you don’t know where to look.

In many locations, socially-conscious legal incubators are supporting modern law practices in a variety of disciplines, including small business startup and management, divorce, child custody, criminal defense, immigration, bankruptcy, housing, and adoption. In Chicago, the Chicago Bar Foundation Justice Entrepreneurs Project began in June 2013 and currently has over 55 lawyers in its network. In Colorado, Legal Entrepreneurs for Justice will launch in June 2019. Lawyers involved in these networks can be found on each organization’s respective website. The American Bar Association also offers a directory of lawyer incubator programs. (The list is not always up to date but is a starting point.)

In many locations, another avenue for finding modern lawyers is through the state or local bar association’s lawyer referral services. For example, the Utah Bar Association and the Colorado Bar Association both allow consumers to filter through the pool of lawyers by selecting predictable pricing models and unbundled services.

Other communities offer panels of lawyers focused on unbundled services. Examples include the Minnesota Unbundled Law Project, the Massachusetts Limited Assistance Representation Project, the Contra Costa County (CA) Bar Association Unbundled Legal Services Attorney Panel, and the Chicago Bar Association Limited Scope/Unbundled Services Attorney Panels. There is a growing movement of law schools partnering with incubators as well. New lawyers work with experienced lawyers to provide low-cost legal services.

If you are having trouble finding a modern lawyer in your area, consider extending your search to national networks such as Unbundled Attorney and LegalZoom. Unbundled Attorney connects consumers with lawyers in their community who offer unbundled services, and LegalZoom offers a suite of DIY service options and the opportunity to consult with a lawyer on a limited-scope basis.

Finally, if nothing else, you can try a good old-fashion Google search using terms like affordable, flat fee, fixed fee, unbundled, flexible, and limited scope along with the type of legal problem you need help with. While you’ll likely get a number of results, you can identify the modern lawyers by those who actually list their fees on their websites.

Accelerating change by exercising consumer choice

While there is a long way to go, the legal profession is slowly changing for the better. Thanks to the modern lawyers blazing a new path, consumers now have choices. Consciously exercising your right to choose when it comes to enlisting legal services is the key to accelerating change. When a lawyer only offers you the billable hour, move on. If a lawyer only offers one level of service that doesn’t work for you, move on. Don’t settle for limited options. Seek out modern lawyers who offer predictable and flexible solutions. Doing so will help increase the consumer choice for all.

Stakeholder Capitalism
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