CLcom run of site - run of site

The Art of Getting Paid

Here’s What to Do When Clients Want Legal Fee Estimates in Unpredictable Cases

Before you can estimate fees, you need to assess the scope of the work anticipated.

By Frederick Hertz  |  September 16, 2015

Imagine if every time you bring your car in for a repair or make an appointment with your doctor, you are told that the likely cost is “indeterminable.” Granted, you aren’t expecting a guaranteed estimate, but hearing that the fees are impossible to predict would not inspire confidence in the service provider. You can’t be the first person to come in with a “check engine” light or a broken arm!

The same goes for consumers of legal services. They understand that the future is unpredictable, but they rightly assume that you will have some sense, however inchoate, of what you are going to do for them. It’s important that you meet their expectations.

Legal services tend to fall into three general categories when it comes to estimating fees: the “almost certainly” predictable, the moderately predictable, and the wildly uncertain.

“Almost Certainly” Predictable

The first category includes tasks such as drafting wills and trusts, processing an uncontested eviction, or filing an application for an immigration visa. Of course there will be exceptional circumstances, but most attorneys who have handled such matters can predict the fees with a fair amount of certainty. Indeed, that is why such services are often provided on a fixed-fee arrangement. For these matters, attorneys should either offer clients a flat fee or give them an estimate of how much time will be involved, with a brief summary of what factors could take it out of the ordinary.

Moderately Predictable

Some work is fairly predictable but could readily result in a lesser or greater amount of work. This could happen  handling uncontested divorces with complex custody arrangements, drafting partnership agreements, or managing trusts with multiple assets. The key to explaining these sorts of matters is, once again, to describe what is involved in the standard situation, and then describe the variables that could lead to higher fees.

It isn’t that complicated. You can discuss what a typical eviction requires, and then point out that if a court hearing is required it could add five to ten more hours. For a trust administration, you can describe how a complex real estate sale could add several hours to the work. What is needed is an explanation that links the most likely variations to a general range of how much more time will be involved.

Wildly Unpredictable

Even in wildly unpredictable areas such as litigation, my hunch is that experienced lawyers can provide far more clarity than they realize. I typically describe to clients the four phases of litigation—pleadings, discovery, settlement negotiations, and trial—and for each phase I lay out the possible range of tasks, with a range of total hours. Then I explain to them the nature of litigation: that it’s like taking a long train trip (think Siberian Railroad) that charges by the week, and we just don’t know when you are going to disembark.

Within this framework, I set forth a range of time for each phase, and show the client how the scale of discovery and the timing of a settlement could affect the fees. My overall statement that fees are “wildly unpredictable” still holds true; what’s different is that I’m explaining the likely tasks and the range of hours in a manner that makes the uncertainty feel more logical, less arbitrary.

Here’s my suggestion: go back and look at your time records of similar matters and compile a realistic assessment of each task. Taking a deposition isn’t just a matter of showing up that day—it involves preparation and often a few hours in the gyrations of scheduling and objections. Settlement conferences include drafting the conference statement, sitting around waiting for the judge, and (hopefully) drafting an agreement. Set a range that is credible—generally, the high side shouldn’t be more than double the lowest amount. And don’t be shy about disclosing how long things really take. Remember, in most instances you don’t have control over the process, especially if it includes other counsel or judges.

Your next task is to estimate the fees. But unless it’s a contingency case, you can’t estimate the fees unless you know how much work is going to be involved.

Frederick Hertz, an attorney and mediator based in Oakland, has managed his practice for more than 25 years.
The art of getting paid

"The Art of Getting Paid" is a one-year series of blog posts that provides a comprehensive training to lawyers on how to get paid.

We welcome your questions and comments – and of course, your suggestions on how to master this insufficiently respected aspect of practicing law.

How to Calculate a More Realistic Estimate of Likely Fees and Costs

Walking the Talk: Being Honest About Money

View the full series »

Reader Comments

We welcome your comments!

Your name and email address are required (your email address will not be published)

Back to Top   ↑
© 2019 Daily Journal Corporation