CREATIVE FEE ARRANGEMENTS
July 18, 2017
RISK V. REWARD
Whether the lawsuit involves breach of contract, negligent construction, failure to provide conforming goods or failure to make timely payments, the integral question is the same: Is the risk worth the reward? Risks include witness reliability, strength of expert opinions and the progression of discovery. Risks also include your financial investment. Incorporating your finances into the equation allows you to calculate the risk of continued legal fees verses the reward of a favorable outcome. When legal fees are charged hourly, the monthly costs fluctuates from hundreds to thousands of dollars as your costs inevitably and steadily increase. The key is to transform your fee agreement to maximize your legal representation and reduce your financial risk. In short, it is time to get creative with your fee arrangements.
One such arrangement our clients like is the monthly retainer option. For each client, the arrangement is catered towards the individual. Clients enjoy the arrangement because there is consistency and reliability. Clients work this monthly fee into their budgets and more accurately project the costs.
Within a flat monthly retainer format, multiple configurations exits. For one business, the monthly retainer provides near unlimited hours per month, exclusive of litigation. All phone calls, legal advice and demand letters are included, for example, during contractual disputes or collection of fees. When suit is filed on any of these matters, legal fees are handled separately.
For another business, the monthly retainer provides discounted hours above and beyond what the monthly retainer covers. In this intentional interference with a contractual relationship litigation, a certain number of hours are included in the retainer. Hours in excess are billed, but the overall savings makes the fee arrangement work.
Likewise, for individuals, a client’s fee arrangement includes a flat monthly fee for a period of eight months. In this defamation case, the client will be reimburse out of any settlement or jury award.
When considering legal representation, ask about monthly fee arrangements as a way to make a sound financial decision. After all, the rewards greatly outweighs the risks.