The Power of Hybridizing Your Flat Fee

There she was: “Jane,” one of my best friends from law school, in a trance. Jane and I had both ended up at “The Firm.” On this cloudy afternoon, as she was wont to do in nearly all of our lunches by that point in our careers, she recited the grueling schedule she would need to meet to meet her billable hour requirement for the month. “If I do 12 hours tomorrow, 13.5 hours on Saturday and Sunday, and then find a way to do 84.5 hours next week, I’ll be on track!”

As my eyes rolled back into the far recesses of my skull, I lamented that our conversations had somehow gravitated to this topic: The billable hour, the bane of many an attorney’s existence about which so much ink has been spilled and so many tears shed.

Had we gone to law school for this? Despite the internships, externships, clerkships, and research assistantships we take as law students to prepare ourselves for that vaunted “life in the law,” almost nothing in law school prepared us for the business of law, and certainly not for the wonders of billing.

The Chimera of a “Flat-Fee Practice”

Imagine my delight, then, when, some years into my practice, I fell into immigration law, an area in which “flat-fee” billing is standard. Utopia. Or so I believed.

The flat-fee billing model has made inroads into most practice areas in the last couple decades. At first, it appeared to offer the key to escaping the cage of the billable hour. The joy of not having to punctiliously track time on projects was no less than inebriating.

And to be sure, the flat fee has its advantages. There was the apparent savings of the countless hours normally devoured by time billing. And in cases our office handled regularly, we came to understand the time and resources needed on such cases, and were able to devise our fees accordingly, streamlining that process, and, in theory, expanding profitability.

Over time, however, the flat-fee model’s limitations became increasingly apparent. First, from a business perspective, keeping records of time worked on cases not only provides us important information internally, to gauge our efficiency and time-effectiveness; from a client-relations angle, having records of time spent on a matter also arms us with crucial data to share with clients who request information on (and perhaps even question) the progress of their cases.

Further, a flat-fee model often proves disadvantageous, if not downright dangerous, to a firm’s bottom line. Those familiar with immigration law may know that change is constant in our field. A simple flat-fee model cannot accurately or sufficiently account for the incessant policy and procedural shifts that seem to transpire on a weekly, if not daily basis.

Take one of the bigger policy changes immigration practitioners contended with recently, until it was overturned in court: the “public charge” issue. Certain categories of applicants for lawful permanent residence (the “green card”) must submit appropriate financial documentation to demonstrate that they will not pose a financial burden to the United States.

While a public charge requirement existed for decades, suddenly a complex application and cumbersome evidence became necessary. It is no exaggeration to state that preparing that application form and researching and compiling all the required evidence could take upward of a dozen hours in some cases—more time than it usually takes to complete all other aspects of such a case—and it is unpredictable. Quoting a flat fee for such a permanent residence process before this policy went into effect, without more, would have left our firm in a highly compromised position.

Immigration is rife with mountains of seemingly “smaller” procedural quirks such as requests for additional evidence, responding to notices of intent to deny, requests for documents already submitted (this is absolutely a “thing” in immigration), and other landmines that rear their unpleasant, unpredictable heads in most cases. Clients often assume—arguably rationally—that these are included in their flat fee. And lawyers without clear agreements have learned that they often end up being so.

Enter the Hybrid Model

Given this quagmire, what’s a lawyer to do? Here is where a hybrid variation of a flat-fee arrangement can prove valuable.

Over the years, our clientele has strongly and consistently expressed their preference for flat-fee billing. Whether it is the certainty of knowing what they will be paying, or whether they have been accustomed to that payment model based on their experiences and history in their communities, the basic flat-fee model remains well-anchored in our practice area.

That said, we have had to take a more proactive approach over the years in constructing our representation agreements, so that they more accurately, fairly, and properly reflect the work required on cases. This includes work on items that were either not initially anticipated or contemplated (such as the public charge process), or work on items that we could not know from the outset may be needed (such as a request for additional evidence).

There are ways of delicately yet professionally and fairly maneuvering the representation agreement dance so as to both fulfill the clients’ needs for predictability and comfort, as well as to reflect and respect the time and effort we attorneys will need to invest, to carry out the client’s representation properly and fully.

In our practice, we do, of course, as most attorneys, draft representation agreements that clearly and thoroughly detail the legal work we perform. We then explain to them the various contingencies that may arise in their cases, as well as items that can be handled in the future at additional cost. We also describe these verbally, so that they begin to take hold in the clients’ minds and understanding, and then delineate them in painstaking detail in our representation agreements and addenda.

The details of any additional work or process not covered in the initial representation agreement, but that is needed in the case, are detailed in an addendum, and charged for according to the terms set out in the agreement. Whether the additional work described in the addendum will be handled on a flat-fee or hourly basis varies from firm to firm. In our practice, we endeavor to maintain the flat-fee system whenever possible, unless a situation arises in which it will be impossible to approximate how much time will be required.

Clarity, Clarity, and Then Even More Clarity

To state the obvious, one of the key factors in making these agreements effective is clarity. Highly sophisticated clients can experience confusion regarding what is and is not included in a representation. For example, a standard family-based immigration case has three steps that can take years to complete—a non-citizen’s lawful permanent residence, removal of conditions on that permanent resident status, and after a requisite time period with fulfilled requirements, the application for naturalization. It is clear to attorneys that these are three different processes that take years, but clients have sometimes believed that once the attorney starts, everything from then on is included.

The addendum introduces further clarity into the process by laying out the various processes and legal work that may need to be undertaken in the future to the best of our knowledge, based on past experience in such cases. And the addendum serves at least three important purposes: First, again, it outlines in detail the various aspects of the case that may need attending to and that would require additional fees. Second, it provides a potential road map for the clients’ case, so that their understanding of what might happen in the case is expanded, and their expectations are properly managed. And, finally, being individually tailored, it allows for the flexibility and adaptability practitioners require in today’s environment, to best meet both their clients’ and their firms’ respective needs.

One Size May Not Fit All, But We All Benefit by Setting Boundaries

As our profession evolves, so must our tools. One such tool is a comprehensive representation agreement, accompanied by an addendum, that precisely reflects and defines the scope and extent of legal work we will perform on behalf of clients. Given the ever-changing landscape those of us in immigration, and undoubtedly, many other practice areas, inhabit, it is more essential than ever that we state these parameters as directly and explicitly as possible.

By doing so, we respect not only the clients’ needs and expectations, but equally importantly, we respect the significant work we do for them. And ultimately, in such an endeavor, we set clear and crucial boundaries that serve to honor ourselves.

About the Author

Anuj Shah is board certified in Immigration and Naturalization Law by the Texas Board of Legal Specialization. He is an associate editor of The Houston Lawyer. Contact Anuj on Twitter @shahlaw.

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