What do GCs really want from law firms? | Flat fees can help ensure you get paid, blogger writes
Edge International’s Pamela Woldow and Doug Richardson recently went to a private meeting in Panama of the general counsel of 35 corporations.
“Their responses were particularly telling—and particularly outspoken—when we propounded a broad meta-question: What do legal departments want from their law firms?” they wrote in their At the Intersection post. “We then sat back, listening intently, typing on our iPads as fast as our fingers could fly.”
Some of their unedited responses:
• Want to win our trust? Skip the tickets to ball games and provide some unbilled legal advice that shows you’re really invested in us.
• Interoffice conferences should be billed, if at all, to the single lowest billing rate of the attendees.
• Please reuse previous work product and then only charge us for updating or changing it.
• We don’t want to use first- and second-year associates, much less pay for them. Their work is immature and their judgment poor.
Flat fee, or flat busted?
At My Shingle, Washington, D.C., solo Carolyn Elefant notes one unheralded advantage of flat-fee arrangements: They can help you win a battle over legal fees.
Elefant notes at case reported this week in the New York Law Journal (sub. req.) in which a judge ruled Kasowitz, Benson, Torres & Friedman could not pursue a breach-of-contract claim for $2.3 million in legal fees from a former client.
Manhattan Supreme Court Justice Anil Singh found that Kasowitz’s fee agreement fell short of requirements stipulated by New York Codes, Rules and Regulations regarding attorney engagement agreements. It did not provide enough detail about the services to be provided for its hourly fees.
“Of course, Kasowitz could have avoided this outcome with a flat-fee agreement,” Elefant wrote. “A flat-fee agreement contains a fixed price for a fixed scope of services and thus, provides the certainty that Judge Singh found absent from Kasowitz’s engagement agreement. Still, most lawyers resist the flat fee, feeling that they’ll somehow underestimate the scope of work and be left working for the equivalent of pennies per hour. That risk can be mitigated by specifying not just a flat fee, but also a fixed scope of work. But even assuming that lawyers take a bath on flat fees in a couple of cases, how is Kasowitz’s hourly alternative—waiting three-plus years to collect a $2.3 million fee—any better?”
While in Chicago for last month’s Clio Cloud Conference, Solo Practice University’s Susan Cartier-Liebel’s travel companion and fellow conference-goer had a minor medical emergency: A blister on her foot “unroofed” and became infected. They went to their hotel’s concierge, and fortunately, the hotel had a doctor on call who was there within the hour and provided great care.
Cartier-Liebel was also intrigued by the doctor’s employment arrangement. “He only does house calls and through a company that contracts with these doctors to offer house calls or concierge medical appointments. My further assumption at this point is that they only collect their fee directly from the patient, as most out-of-state travelers would be out-of-network for their insurance coverage anyway. By doing this they don’t have the hassles of dealing with the insurance companies, the reduced fees paid by same, or patients who give false information never to be found, again. He gets a significant cut of each visit without maintaining the overhead of a doctor’s office. The fee was $400. You do the math.”
She wonders if lawyers could fashion similar arrangements. A foreign traveler might be arrested and need a lawyer who can speak his or her language. Or, a traveler might be seriously injured while traveling and want to create a will or a durable power of attorney. “Isn’t there a class of client who would pay for this type of on-demand relationship with a quality lawyer, especially when they are in an environment where they have no pre-existing attorney/client relationships and the matter rises to the level of a legal emergency? Imagine the solo/small firm lawyer smart enough to establish a relationship with major hotels, conference centers, hospitals, even airport information counters in their city to offer such a service?”
Cartier-Liebel does note that if a lawyer’s relationship with a hotel “ultimately involves any exchange of services or goods,” it could be considered a referral fee and run afoul of professional conduct standards.