Fees: Make Sure the Price Is Right
Autonomy may seem like the watchword when it comes to fees, but that is not entirely true. Although a lawyer does have a lot of latitude and independence in terms of pricing, ethics is also a consideration.
When setting their billing rates, lawyers have only one formal requirement. According to ABA Model Rule of Professional Conduct 1.5, "a lawyer shall not make an agreement for, charge, or collect an unreasonable fee." The Code defines reasonableness by such factors as the following:
The time and labor required The novelty and difficulty of the questions involved The skill requisite to perform the legal service properly The customary local fee for similar services The amount involved and the results obtained The time limitations imposed by the matter The experience, reputation, and ability of the lawyer
So, are lawyers who charge $1,000 an hour "reasonable"? How about $100 an hour?
Although it may seem that pricing is a free-for-all with no real boundaries whatsoever, the fact is that there are boundaries. There are market-place boundaries and ethical boundaries. These boundaries were delineated by famous lawyer Abraham Lincoln in notes for a law lecture:
The question of fees is important, far beyond the mere question of bread and butter involved. Properly attended to, fuller justice is done to both lawyer and client. An exorbitant fee should never be claimed. As a general rule never take your whole fee in advance, nor any more than a small retainer. When fully paid beforehand, you are more than a common mortal if you can feel the same interest in the case, as if something was still in prospect for you, as well as for your client. And when you lack interest in the case the job will very likely lack skill and diligence in the performance.
Today's environment for lawyers is different than then. And whether we seek an hourly fee or a fixed/flat fee, the client must still perceive that he/she is receiving value for the engagement.
|
