Ary Rosenbaum

May 2010

When I take my dress shirts into the dry cleaner, I get a claim ticket that tells me the cost. My local pizzeria has a menu with set prices. My local supermarket places the prices of their items on signs and shelves around the store. Yet most law firms still cling to charging their client by the billable hour with no set price on their list of services.

            In uncertain times, local businesses need cost certainty. Small and medium size businesses have to watch every nickel and dime. That is why law firms need to get with the times and start charging their clients on a flat fee and cost certainty basis.

            While it would be impossible for law firms to price the cost of starting or defending a lawsuit on a flat fee basis, many services such as corporate formations, contracts, and wills can be effectively priced by a law firm on a flat fee basis.

            I have been drafting retirement plan documents for 12 years and I think I may be at a point that I could do draft them in my sleep (only kidding!), so I realize how much time it takes and what is a reasonable cost to compensate my time. So my clients appreciate when I give them a flat fee, as opposed to another law firm who will bill on an hourly rate plus also charging for such out of pocket items such as copies, binding, and postage. From experience, clients would enjoy paying a flat fee with cost certainty, rather than a law firm that has a billable hour with no end to the fee in plain sight. I am convinced that clients would rather play a slight premium to their legal bill and pay a flat fee, than a fee tied to a billable hour which requires the attorney to charge a client for every phone call.

            I will never charge a client for a phone call or to have lunch because I believe when it comes to a client, relationships mean everything. I don’t believe an attorney-client relationship will last long if the client feels they are being nickled and dimed by their attorney.

            By charging a fee tied to a billable hour, I believe encourages law firm to overbill their clients on such important services as client research. A flat fee encourages time efficiency for the attorney since there is no room for overbilling.

            In 1492, most people were convinced that the early was flat. In 2010, most law firms are still convinced that the hourly fee is the most proper form to bill clients. Tell the legal flat earth society to get with the times and offer a flat fee for non-litigation matters.

Ary Rosenbaum

The Rosenbaum Law Firm P.C. - TheRosenbaumLawFirm.com

516-594-1557