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Saul Ewing Puts Fixed-Fee Options in Writing—on the Web

Posted Jun 18, 2009 4:33 AM CST
By Molly McDonough

Law firms more and more are promoting that they offer alternative fee options for clients—something different from the traditional billable-hour model.

Now the mid-Atlantic firm Saul Ewing has stepped it up a notch, making its fixed-fee programs available for anyone to see, right on its website.

It's a move that Altman Weil calls unique both because the firm went public with the program and because it's focused on practices that are a good fit for alternative fee arrangements.

The Legal Intelligencer reports that this week, the firm posted its "Cost Certainty Commitment," which outlines programs in which either clients can pay a fixed fee or pay by attorney per day.

"As a midsize firm, we felt like 'shame on us' if we can't be very nimble in responding to this market activity," the firm's managing partner, David Antzis, is quoted saying. "We wanted to act quickly and with market specificity."

In its online marketing statements on the program, Saul Ewing notes that the program is the result of client satisfaction surveys.

"Our Cost Certainty Commitment offers in-house counsel the peace of mind that their legal needs will be satisfied with measurable value: attorneys whose depth of experience avoids reinventing the wheel, instead making full use of existing work product and knowledge, and using agreed-upon cost structures intended to help project costs for budgeting purposes," the firm pledges.

Antzis tells the Intelligencer that the firm hopes to make up any lost fees by increasing the firm's volume of legal work. The firm has posted two types of arrangements for now—plans for due diligence work and for Pennsylvania insurance administrative hearings—and is calling on its partners to come up with more.

Firms have long talked about alternative fee arrangements to meet client demand for a move in this direction. Saul Ewing made the move, in part, because this time, clients seem particularly serious about it, Michael Consedine, the firm's vice chairman of the insurance practice in Harrisburg tells the publication.

"It's our sense that what we're seeing right now in terms of the way companies are approaching legal services may be a real paradigm shift in terms of how the industry will work now and in the future," Consedine says.

Comments

1.

associate
Jun 18, 2009 8:56 AM CST

I predict that this works fine right up until all of the “special” clients at their firm and other firms swamp them with calls and questions outside the scrope of the agreed upon fee arrangement (i.e., hold my hand) and expect it to be done for free as a corallarly to the fixed fee work.

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2.

tim
Jun 18, 2009 9:05 AM CST

This doesn’t work. We just closed a deal where the other side was on a fix fee arrangment.  They had to eat a huge portion of the bill.  Sucks to be them.

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3.

B. McLeod
Jun 18, 2009 11:12 AM CST

Obviously, they are hoping to make it up in volume.  As far as hand-holding, if I am paying a fee for a lawyer “by the day,” they should be willing to Simoniz my car if they run out of work to do on my file.  (I predict that what may happen instead is the billing of the same “associate/day” to multiple clients, much as many firms do with the “associate/hour” currently).

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4.

Guy Messick
Jun 19, 2009 6:31 AM CST

Our small firm has been doing this fee arraignment for years.  If you have a well defined scope of work that is fairly predictable as to the hours required, you will make money on 85% – 90% of files and lose money on the balance but your volume will be much higher as clients love the certainty of the fee.  The argument that clients will burden the attorney with excessive contact because there is no meter running to dissuade them is not true in our experience.  We find the client relationship is much more relaxed and congenial in a fixed fee arrangement and there is no more contact than in an hourly fee arrangement.  The profession will have to get used to fixed fee or not to exceed fee arrgenement because that is where the legal market is headed.

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5.

Jon Yormick
Jun 19, 2009 7:40 AM CST

Like another small firm commenter, we have also used alternative billing for years and have similar client experiences and results. Our billing policies and rates have been posted on our website since last year and the feedback has been positive.

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6.

JME
Jun 19, 2009 9:10 AM CST

As a solo, I went fixed fee on several items, it works just fine.  Folks come in or call “how much will it cost me?” I have an answer, and I take payments up to the filing date.

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7.

HBK
Jun 19, 2009 11:28 AM CST

It seems that to figure out a fixed fee for larger projects, it would be helpful to have a good database that has information about a large number of similar projects and the time & cost for each component of such a project.  Has anyone created that type of database or compiled such information.

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8.

Bubba
Jun 19, 2009 12:41 PM CST

If anybody doubted that law is a commodity service business, I’d say this pretty much settles the issue.

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9.

Philip Marcus
Jun 19, 2009 1:00 PM CST

As Saul Ewing said, they “have found the process of representing insurers at such hearings [insurance cancellation appeals] to be relatively predictable in terms of cost and time involved.” For such predictable matters fixed fee makes sense.  Is anyone suggesting non-routine civil litigation or felony defense can be made fixed fee?

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10.

john
Jun 19, 2009 10:37 PM CST

#9 I was thinking the same thing.  There are too many unknowns in a lot of civil litigation that would seem to make flat rate billing too risky.  Also, most of this appears to be about client perception.  They really aren’t saving money, and we’re still going to be breaking down our profitability by hour.

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11.

B. McLeod
Jun 19, 2009 10:52 PM CST

I think it could.  I think you would look at you past experience on how many hours it took to dispose of different types of cases, and you would add a little buffer factor in setting your usual fixed fee.  You would also need to do a careful enough front-end analysis to pick up whether there is likely some facet of the case that would justify an addition or reduction.  I think the absence of careful front-end analysis is where many lawyers get in trouble.  It results in lawyers taking cases they shouldn’t take, and sometimes also in ill-conceived fee arrangements.  It actually makes a degree of sense to do the conflict check, then do the initial consultation free, then do the statute of limitations check and (if you have time) a couple of days of front-end evaluative work free, before you agree to take the case, and before you discuss the fee arrangement.  If the case is an uneconomic dog, explain to the client why it is likely to cost more than it is worth.  If it’s marginal, refer it (unless you’re absolutely starving).  If it’s a good case with good liability, good damages and probable collectibility, take it and use your evaluative work to formulate your fee proposal.  So often, I see colleagues in trouble because they thought they had to take every piece of crap case that came in the door, then got a few good ones, but ended up spread too thin to handle even those properly.  Good front-end work, and limitation of low quality caseload, helps to prevent that problem.

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