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Talking to Clients about Your Flat Fee

By Kristin Tyler
July 31, 2018

Setting a flat fee for legal services can be difficult. As discussed previously, there are several factors you should evaluate in projecting how much time a project will take you, so you ensure you are making a sufficient profit. One thing you also should consider is whether to involve your client in setting the price. Discussing the fee with your client helps clarify the scope of the work and enables your client to make choices about the level of service they want.

When should you discuss pricing

If the work involved is clearly defined with little risk of scope change, it may not be necessary to have an in-depth conversation about pricing. However, where you have a more complex matter or a sophisticated client, you should discuss costs and then confirm them in writing.

What to discuss

You want to ask the client about their needs, goals and timeline. For example, maybe your client is more interested in a quick sale than getting the best price for their business or there is a minimum amount they want to recover in a lawsuit. As you discuss the matter, you will need to look for issues that may increase costs. Are there a lot of potential witnesses, other parties or claims that may arise, etc.?

It’s important for both of you to agree on the scope of the work and specify what will and won’t be covered by the proposed fee. For example, how many depositions, contract drafts, etc. will be included? Using pricing tiers can be helpful in setting service levels and even communication preferences. For instance, do your clients want to be able to talk with you personally every day on the phone? Every week? How often do they want reports? You should also establish change fees and hourly rates for additional work outside the scope of the initial agreement.

Regardless of whether you have an in-depth conversation with your client regarding fees, you want to ensure there are no misunderstandings. You are most likely to set a profitable price and have a satisfied client when fees are clearly explained and transparent from the onset of the engagement. In a later blog post, we’ll discuss what terms to include in your engagement agreement when working with flat fees.

Flat fee billing is an effective way to grow your legal practice. To learn more about the benefits, read our related post on 5 Reasons You Should Consider Flat Fee Billing.

Using freelance attorneys is a great way to reduce your labor costs and increase your profitability in a flat fee case. For information on how outsourcing can help your firm, read 6 Benefits of Using Freelance Attorneys Instead of Hiring Associates.

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