Clients always complain about their attorney fees for a divorce. Below, the different ways that attorneys charge for a divorce.
1. Flat Fee
A recent blog put forth the idea that the best way to bill is on a flat fee basis. there are merits to flat fee billing if each case can be processed very quickly with few court appearances. In most instances, a flat fee billing is neither fair or reasonable to the clients or the attorney. If a flat fee is high the client is often charged more for services than is justified in his or her divorce. If the flat fee is low the attorney will not be providing full or adequate services, and if problems arise they often will not be properly dealt with. If the client calls every day knowing that he or she is not going to be billed for it this can encourage a lot of wasted time. In those instances the attorney may not be handling the case as thoroughly as necessary or giving all the time that should be devoted to a particular divorce case. If problems arise and what starts out as a simple case suddenly becomes complicated then the flat fee arrangement can turn into a disaster for everyone.
2. Hourly Billing:
This is the most common fee arrangement. In my practice, I normally bill on a retainer against an hourly basis. Some attorneys will take the position that the retainer is just to retain the attorney and then the fees on an hourly basis are billed on top of the retainer. In the past when the economy was good and people weren't hesitant to spend large sums of money on legal services, that might have made sense. In these tough economic times that makes no sense at all. What I normally do is charge a retainer and then an hourly rate against the retainer. If the case is simple, with few problems, the retainer will cover the entire fee. If problems arise or a lot of time goes into the case, then an hourly rate will be billed once the retainer is used up. I tell my clients in advance to maximize time, not call every day, raise several questions at once and utilize my support staff or associate in many instances, to maximize the amount of legal services and minimize the fees involved. Hours are normally divided into increments. Some attorneys bill in quarter-hour increments, and others in a third of an hour or a tenth of an hour. For convenience, I bill in quarter hour increments. Some attorneys will bill in a third of an hour or a tenth of an hour, but I have found that quarter hour increments make the most sense. This means that for every phone call I bill a quarter of an hour. Any correspondence or work done on a file is billed upon these time increments. This includes phone calls, e-mails and court appearances. Some attorneys will bill a minimum of one or two hours for court appearances. Driving time is usually billed as well. When you meet with an attorney you should discuss the fees carefully and find out exactly how the billing is done and what is the standard practice for that attorney.
3. Unit Billing:
Some attorneys are using what is called "unit billing," which means that they bill not for time but rather for units. The argument for unit billing is that as an attorney becomes more and more experienced with more work on the computer, work that might have taken an hour or two can be done in a quarter hour or less and therefore unit billing is done because an attorney who is more efficient and experienced should not be punished for his/her efficiency or expertise.
4. Value Added:
Another means of billing which is frowned upon more and more, especially here in Michigan, is what is called "value added," where if there are exceptional results on top of the hourly billing or retainer there will be some type of bonus at the end.
As you can see, in family law there are many ways to bill. The critical thing at your initial consultation is to make sure you understand how you will be billed and also make sure that everything is spelled out in writing. You should always have a written contract or retainer agreement with your attorney, so that if there are problems or issues in the future it is all clearly spelled out.
I welcome your thoughts or ideas with regard to this sensitive and important issue of attorney fees in divorce litigation.