Everyone hates lawyers. More correctly, everyone hates other people’s lawyers, and fear the bills from their own lawyers. I can’t do much to effect the former, lawyers get involved in difficult and contentious situations, and frankly, some of my brethren are jerks. (I am sure from time to time, opposing parties think of me that way.)
However, there is a cure for the angst in the relationship between businesses and their litigation counsel, flat fees. When we charge businesses by the hour for representation in a lawsuit (and I have done it for 12 years now) it creates an immediate obstacle in our relationship. Every communication, task, and event has this cloud of “how much is this costing me” over it. It is not an insurmountable cloud, I have a great relationship with many of my clients, but it is in despite of the hourly fee arrangement. This positive relationship is something developed with trust and time to overcome the uncertainty, fear, and frustration that comes with getting billed for every e-mail or phone call. It also puts a cloud on every suggested strategy move, as the business can’t help but wonder whether the suggested task is motivated by doing what is best for their case, or milking a few more hours out of the matter. Again, this can be overcome through time, trust, communication, and results, but the very act of billing by the hour creates this hurdle to be overcome.
Counter-intuitively, I find that business clients that are being billed hourly are actually more likely to call or e-mail to rehash what we have already discussed. For a long time I thought it was because my business clients just couldn’t stop thinking about their case, and didn’t care if it cost them more to go over everything one more time. I have come to realize it is because they wake up in the middle of the night with nightmares of the meter running and no way to budget for what this month’s litigation might cost. While it may have the opposite effect, it is human nature when you are concerned about the uncertainty of a cost to be constantly contacting your lawyer to make sure everything is on track and only exactly the minimum amount of work is being done on your matter. This is no way to live.
On the other side, when there is an alternative fee, whether that is a contingent fee, a blend (where hourly charges are capped with a success fee), or our new Flat Fee Business Litigation model (read more at www.hallingcayo.com/flatfee) the whole paradigm shifts. We work out an arrangement for compensation of our services, and that portion of the relationship is done. Business owner and lawyer now know, exactly, what this will cost. The entire focus can now shift towards what do we need to do to accomplish our goal in this case (which is usually to resolve the dispute as quickly as possible). Me and my team are freed up from having to wonder whether the client can afford this particular tactic this month, whether the new lawyer I want to do research is billing too much time, whether I can bring one of my partners in to consult on an issue that ultimately will help the case and save time, but the optics of having two or three attorneys billing at $350 per hour for the same meeting means we shy away from it.
Once we are outside of the constraints of managing a bill for the client, making sure it gets paid each month, discussing questions or possible frustrations on a bill, we have far more time and mental energy to focus on the task at hand, getting a good result for our business client on the case. Again, counter-intuitively, the non-essential rehashing conversations with the clients go down in these arrangements. We have now fostered a relationship of trust simply by being willing to quote a price and stick with it. The client is no longer concerned about what it costs (it may still be expensive, but it is a known and budget-able cost) and can trust the professionals they have hired to handle the matter. This does not mean we don’t talk to our clients about their cases regularly, it means that the only conversations we have are when something has happened or an issue that moves the case forward needs to be resolved. This lowers the cost of litigation for everyone, as neither the business nor the lawyer is wasting their time focusing on billing and hourly charges or checking up on whether the meter is running or not.
Perhaps the relationship with lawyers, businesses, and the public will never be perfect, but in my opinion alternative fees can go a long way towards taking the strain off of the relationship between a business and its litigation counsel. Moving away from worrying about how much it is going to cost, and jointly focusing on how we are going to win, is a huge step forward. Learn more about how flat fees at Halling & Cayo for Business litigation work at www.HallingCayo.com/flatfee
Sean M. Sweeney is a shareholder at Halling & Cayo. His practice focuses on business litigation, offering flat fees for business litigation, and recovering investors losses as a result of stock broker fraud on contingent fees. Sean represents investors in FINRA Arbitrations and companies in Wisconsin, all over the United States, as well as internationally with clients in Canada, Germany, and Australia.
Email Sean: [email protected]
www.The-Securities-Lawyers.com : www.HallingCayo.com/Flatfee