13620 W Capitol Drive, Suite G, Brookfield, WI 53005 info@cornerstonelawllc.com +1 262 501 2686

Flat Rate vs Hourly Rate

Flat rate services, also sometimes called fixed fee, limited scope representation and, in the industry, unit billing, is a way to provide legal services for a fixed rate. Other types of billing include hourly and contingency fees.

The key to quality flat rate services is properly defining what is, and is not, included. If not properly defined you, the client, either expect more than you are supposed to get or you are entitled to more legal services than the attorney anticipated. In the first case, you might not be happy because all your goals may not be met, and in the latter case, the attorney becomes overburdened and may not be able to provide quality services.

If you're interested in flat rate services for estate planning or real estate, Cornerstone provides several different services for a fixed fee.

A Brief History of Billing

A long time ago, when circuit courts meant judges literally packed up and traveled in a circuit through the state, flat rate services were the standard. The attorney and the client would agree on a service and a fee. But, as the law became more complex and as the attorney's job to fully represent the client (even in ways the client wasn't interested in) was imposed by the regulatory bodies, it became more difficult to know exactly how much work the lawyer was going to do.

With that uncertainty, change was needed, so the hourly model started to dominate around the 1960s. The hourly rate accounted for the unknowns in representation. Contingency fees also became a standard as time passed, rewarding the attorneys for success and providing further incentive for them to do their best.

What to Look For

Not all legal services, however, are unpredictable. Transactional work (as opposed to litigation) may be easier to predict. When looking for services, flat rate may appeal to you because it makes your costs known. In order to get the best services, there are certain things you should look for:

Price. The price is incredibly important! Not only the price, but payment options: can you pay by credit card, can you pay in an installment plan; do you pay up front or after the work is completed? All these matter, and as a consumer, you're already well equipped to decide what's best for you.

Services Provided. Flat fee is inherently limited in scope. Remember, slavery is illegal, and to pay once for the possibly unlimited representation required by law might just fit that definition. You should know and understand what is and is not included in a fixed fee you agree to.

Written Agreement. Any time you want to purchase flat rate services, you should have a clear understanding of the services your attorney will provide you; the best way to achieve this is to have it in writing and have your attorney explain it to you. In Wisconsin, any time your fees will or are anticipated to exceed $1,000, then your attorney must provide you with a written agreement.

Experience. In order to provide an appropriate flat price for any task, your attorney needs to understand your needs and know the law well. The more similar work an attorney has done, the better he or she will be able to provide a quote for you.

Complexity of your Needs. Your attorney may be able to better predict this than you, but generally, the more complex your needs are, the more likely hourly or contingency fees will appropriately compensate for the unpredictable nature of the matter. Remember, if you have a complex issue and agree to a flat fee, one of two things will likely happen: you'll overpay or your attorney will be undercompensated and thus be less motivated to provide you with the best assistance.

Cornerstone Law, LLC does not provide legal advice through this website; legal advice, by its very nature, requires a full understanding of your personal situation and can change from jurisdiction (your location) to jurisdiction. This website does not intend to provide legal advice, but instead, provide a general background education on different legal topics. If you would like legal advice, please contact Cornerstone here.

No Comments Yet.

Leave a comment

You must be Logged in to post a comment.