How We Bill
Some information on my law office’s policies and procedures on how my law office charges for my services, but first, we do have reasonable flat fees for routine estate planning services.
Nature of Legal Services
You are purchasing a service rather than a product. A service renders benefits; however, those benefits may not be tangible at first. Even though a service may be provided, the ultimate desired result may or may not occur. This is because I cannot control all of the factors involved in handling the legal matter. A product, on the other hand, is tangible. It is fairly easy to determine the value of the product.
The purpose for purchasing legal services is to solve a problem or accomplish a desired result. Accordingly, the client’s monies are used to employ the attorney, staff members, paralegals, office assistants, secretaries, and physical equipment in order to do their best to meet the client’s desired goal.
Lawyers have business overhead, which must be included in their fees. This includes but is not limited to attorneys, legal assistants, or paralegals and in some cases investigators, secretaries, receptionists, bookkeepers, clerks, etc.
In order to function and provide professional services, my law office has heavy capital expenses such as access to electronic law libraries, computers or word processing machines, copy machines, typewriters, office furniture and equipment, file cabinets and file storage equipment in order to keep up with the many matters handled by my law office.
Guaranteed Outcome or Results
You understand that I cannot guarantee any expected outcome or conclusion of the legal matter due to numerous and complicated factors which are beyond my control. Accordingly, I cannot guarantee a favorable outcome in any litigation or business matters that I am handling for you. I will, however, within the bounds of legal ethics provide reasonable and competent services to represent and protect your legal interests. In the event the matter requires negotiation or involves litigation, I will negotiate with the opposing party on your behalf in order to settle or resolve the dispute. I will not conclude or settle the matter without your approval.
What factors are involved in determining the lawyer’s fees? Most attorneys take the following factors into setting their fee:
|The type of case involved whether it is a simple and routine matter, or whether it is a complex, highly technical matter,|
|The urgency of the matter and need for overtime work etc.,|
|Whether taking this matter will preclude the acceptance of other employment,|
|The total amount of time involved. Can the matter be delegated to staff personnel such as paralegals or secretaries or must all of the time be spent by the attorney? With respect to the attorney’s time, how much of the time will be spent by highly trained senior attorneys in the office versus junior attorneys in the office,|
|The expertise of the attorney,|
|The results obtained,|
|The customary fee charged in the area and|
|The additional costs involved, if any, amount of secretarial time, insurance surcharges on this work etc.|
Type of Fee
The fee may be a flat fee, such as a one-time payment to cover all of the costs for the matter desired, such as an incorporation, an uncontested bankruptcy, divorce, or the fee may be based upon an hourly charge for all of the time that the attorney spends on each particular matter.
In some cases, as allowed by law, the attorney may charge a percentage of the monies awarded. This is called a contingency fee. Contingency fees are frequently charged in the following areas:
|Worker’s compensation and|
|Plaintiff lawsuits involving an award of money damages.|
Flat rates are designed to make the fees affordable to the client and are used primarily in routine, simple, or ordinary legal matters. A flat fee is always based on certain assumptions. If those assumptions are incorrect, changed, or are modified, then the attorney must revert to an hourly rate since he cannot provide competent professional services as requested and needed under a flat fee arrangement.
For example, the fee for a divorce proceeding might include a meeting with the client, determining the client’s needs, drafting and filing the divorce petition, having the spouse sign a document which waives service of citation, preparation of an agreed divorce decree, representing the client at the hearing and obtaining a final agreed divorce decree.
In the event the matter cannot be resolved by agreement and the opposing party refuses to sign the appropriate papers, then the flat fee arrangement would not be used due to the change in circumstances. In such a situation, I would apply the flat fee as a retainer or deposit against the total fee owed and once the hourly rate fee exceeds the monies previously collected, bill the client on a monthly basis for my hourly work.
Our hourly fees are set as follows:
|Arthur H. Geffen||$295-$450|
Attorney’s fees, unfortunately, are not pure net profit as some clients may assume. Fees are considered gross income out of which numerous expenses are deducted. As with all businesses, sometimes expenses exceed income and attorneys, like everyone else, have to manage their cash flow in a professional and businesslike manner.
The attorney and office staff keep track of their time in minutes to the nearest quarter hour and record their time daily. Time record notations are made for any and all work performed, including, but not limited to, office conferences, legal research, and preparation of legal instruments, telephone and personal conferences, trips to and from the office to the courthouse or client’s office, and any other billable legal services.
The hourly rate represents the prevailing time rate charged by the individual performing the service. Time is kept in quarter hour increments and the hourly charge is the time that the attorney allocates for the matters performed on your behalf. Depending on the type of matter and the problem at hand, the hourly charge may be a standard time allocation rather than the actual time spent.
Hourly time charges may reflect the actual time spent on the legal matter or it may reflect a block of time that was allocated or charged for a certain project. For instance, a bill may indicate a charge for one hour for preparing an answer to a lawsuit. This may be a standard charge even though the actual time may have been only 20 minutes of the attorney’s time and 25 minutes of the secretary’s or another staff member’s time.
Some projects are based on the allocation basis because the attorney has spent a great deal of time developing forms, procedures, and computer applications used in handling your legal matters. Rather than charge the client for the set up time and charges, it is easier and more fair to allocate a portion of the set up time by using the allocated amounts discussed above. This way the client benefits from the attorney’s experience and efficiency without having to pay for all of the attorney’s time.
PAYMENT OF OUT OF POCKET EXPENSES
Out of pocket expenses are billed periodically and are due upon receipt by you of our invoice.
You will be invoiced monthly if the deposit is not sufficient to cover the charges due. I shall either request a new deposit or bill you on a monthly basis for services rendered. Each billing will set forth a summary of legal work performed, fees earned, and costs, and the amount owed to my law office.
In the event that the payments are not made to me promptly as requested, I reserve the right to immediately withdraw from representing you in any and all matters that the law office is handling. You agree to the withdrawal and release from liability of our law office.
During the consultation, the attorney and client should ascertain what the law firm will do for the client. In very simple matters, the attorney may be able to advise the client of his legal rights, remedies and responsibilities during the consultation and no further services may then be needed.
The consultation includes meeting the client, ascertaining the facts that gave rise to the need for legal services, analyzing the situation and advising the client what, if any, services the law firm may be able to perform for the client.
Most consultations last anywhere from 15 minutes to an hour. You should not expect the attorney to give you an answer to the problem during the consultation since many legal matters require legal research, investigation, or discussion and consultation with other members of the firm.
As with other businesses, my expenses and overhead increase periodically due to inflation, increased salaries, improved and better equipment, updates for books, etc. Accordingly, my fees must be adjusted in relation to my expenses. Of course, when such an increase is required you will be contacted and advised of the increase.
If you are hiring us for a specific engagement, the terms of that engagement will be spelled out in a separate letter setting forth whether we have agreed to a flat fee, hourly fee or contingency fee.