During the most recent recession, business owners were looking for innovative ways to decrease their expenses and many of them chose to reduce the amount they spent on legal services. As businesses started demanding more cost-effective services, hourly billing started to lose favor and paying a flat fee for lawyers began to pick up momentum.
The trend toward flat fees in law
In a piece published in the Washington Post in April 2014, Catherine Ho reported that 37 percent of chief legal officers anticipate the change to alternative legal fees to increase over time. In 2009, only 28 percent of law firm leaders expected this change to be permanent, but that number had jumped to 80 percent by 2013. This trend is a bonus for solo lawyers who believe that flat rates are more beneficial to their clients.
What this change means for the legal industry
As more companies are seeking the opportunity to curb their legal costs, they will likely be turning away from larger firms that continue to use the hourly billing model. This change alone opens up a world of possibilities for small law firms and solo lawyers who find it more cost-effective and less time-consuming to bill on a per-case basis.
What about litigation time and effort?
One of the biggest concerns about package or flat-fee pricing is the amount of time it can take to resolve an issue through litigation. Often, it is impossible to predetermine the amount of time that a lawyer will spend on a litigation case. However, even in this scenario, it is possible to set up a front-end flat fee to be followed by bonuses based on performance once the case is resolved.
Flat-fee pricing is perfect for solo lawyers
Whether you are just leaving law school or you are a seasoned veteran transitioning from a large firm to a solo practice, you have more opportunities than ever before to control your costs. As a solo lawyer, you are in a control of your own business model and have the flexibility to offer flat-fee pricing, which can be a competitive advantage for you as well as a benefit to your clients who are seeking cost savings.
LawBank can help you keep your costs down with our affordable and flexible co-working leases and office options. If you are looking for a place where you can launch or grow your solo law practice, contact us for additional information.