Tiered-Service Plans: Coming Soon to a Law Firm Near You?

Published on: 
11/12/2013
In a recent article in the Los Angeles Times, the writer describes a twist in medical fees. A cardiologist is charging a premium retainer fee for accessibility. (That's access, not treatment!) The levels of service created by the cardiologist are $7,500 a year for "concierge" service, $1,800 for "premier" status, and $500 for "select" status. The differences among the levels range from appointment priority to 24/7 access by phone or email.

Medicare or private insurance still pays (or doesn't) for the actual service, but the doctor claims that Medicare reduces his billing rate and that the tiered-service approach is a way to earn the money he can and wants. That is brutally frank. But, as in other areas, economics control.

Can you imagine having a heart problem, being treated by a cardiologist, then having to pay more for the ability to get an appointment in time to save your life?

In full disclosure, I had the need to see a cardiologist last year, one I considered to be my doctor because he conducted a stress test on me several years before, and I couldn't get an appointment for three months. I was considered a new patient by the receptionist, and the doctor was discouraging new patients (what a financial boon for that doctor). I could have died waiting to see him.

Could a lawyer ethically take a similar approach to deciding whether a potential client is "worthy" of receiving certain levels of service?

Interestingly, the Rules of Professional Conduct don't particularly address the issue. A lawyer must be diligent in representing a client (Rule 1.3), must charge a "reasonable" fee (Rule 1.5), and can decline or withdraw from representation under certain circumstances (Rule 1.16). Lawyers have "a responsibility to provide legal services to those unable to pay," but this pro bono service is explicitly voluntary (Rule 6.1).

But even if attorneys can make distinctions in who they help and how they help them, should they?

The legal community is talking about value-based billing: becoming a partner with the client in the results achieved — very different from the access retainer established by the doctor. And retainers charged by lawyers most often are service retainers with unused portions being refundable. There are some, but very few, access retainers charged by lawyers. The bar frowns on such arrangements and scrutinizes them very carefully.

It's interesting that general practitioners in medicine don't seem to utilize the tiered approach. In general, like lawyers who are busy and don't want to expand, doctors simply raise their rates. Some even refuse to take Medicare because they want to receive that which they charge rather than be subject to review by an independent, consumer-oriented agency. They don't, however, seek to treat only the rich.

But specialists are essential, if you need them, and are in a much better economic bargaining position. They can charge what they want, or so it seems. The doctor in the article has succeeded in separating his patients — and doesn't care about the few who will leave to find another specialist charging under the traditional fee model.

For lawyers, the better and more professional course is to undertake full due diligence before entering into a formal engagement agreement with the client. At the time of engagement, an attorney must understand the goals of the client and whether the client is willing and able to pay.

I've written previously that clients who will not sign a fee agreement or pay a retainer should be suspect. So, too, should clients who have unrealistic expectations or who demonstrate a bad attitude toward the legal system. Due diligence is a business essential.

Declining representation of clients who are potential problems can preclude fee collection difficulties and possible malpractice claims. But it is best to decide on a case by case basis, not with a blanket "pay-to-play" approach.

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