In a prior post, I wrote about a New York Times' article on the problems of lawyers charging hourly rates. At the end, I said the hourly rate is a legitimate basis for a lawyer's time in divorce and other family law matters, and generally there isn't another good choice.
In these cases, no one can predict how difficult the case or parties will be. Emotions often drive the litigants, and no matter what happens in their case it will result in a big change in their lives so there is an incentive to fight. The lawyer often has no control over how difficult the case will be, and there are no limits to the amount of work that would be required. Under the best of circumstances, the lawyer can usually not predict how much work will be involved. In some types of legal work, taking a case on contingency changes the equation. However, [at least in most states] a lawyer can't take on a divorce case for a percentage of the outcome he gets for his client.
No matter how good the lawyer, he cannot predict how much time it will take to handle almost any family law case, whether custody, division of property, modifying support, collection, etc.
Maybe a lawyer can charge a flat fee for handling a default divorce where everyone is in agreement. But what happens if one party to the agreement decides to change his or her mind, repeatedly - what if you can't get their cooperation to produce the documents required - what if the court wants the lawyers to keep coming in and explaining why the case is taking so long to resolve? How can the lawyer work for other clients when dealing with these problems on a few cases for which he can't charge for the extra time? Is it fair to the lawyer?
The bottom line is that these are cases where the lawyer only has control over his conduct, having limited control over his client, and virtually none over the opposing party or his lawyer. Even judges can be unreasonable in their expectations, causing multiple hearings, increasing the cost. How does the lawyer charge a client under those conditions?
A few beginning lawyers may need the work enough to quote a low flat fee - in the end, if the case gets complicated they have to cut corners somewhere, or quickly lose interest. It is rare for a competent lawyer to pretend to do a case for a flat fee unless the scope of representation is clearly limited - perhaps a single hearing, or writing a letter.
Retainers to start a case vary widely. In Family Law, sometimes the lawyer assesses the minimum amount of work the case will take if everything flows fairly smoothly, maybe building in a cushion for a little negotiation and re-drafting. Some lawyers have such erratic cash flow, they may set a minimal retainer to encourage the client to retain quickly so the lawyer can make his rent payment or cover payroll. A few lawyers set retainers based solely on what they think they can get, or high retainers hoping to sweep in a few clients willing to pay extra for perceived value.
If I am conducting a mediation, I can pretty well count on the parties spending 2 to 4 sessions of about 1 1/2 hours with me, and 4 or 5 hours of a paralegal's time to process the paperwork. Theoretically, I can ballpark a flat fee, occasionally making a small profit and occasionally losing a little. There isn't too much risk to either side of the transaction.
But what happens when the parties take 17 visits over several years, and the visits often run to 2 hour sessions because they just can't get the real picture? How can an attorney build that extra time into a fee unless he charges by the hour? Where the hourly rate is perceived to create a conflict of interest for the lawyer, what about going the other way - the lawyer decides to put in minimal effort because he feels he's done enough work for what he's been paid.
In the Times article, the point was made that the lawyer benefits from spending more time - in my mediation example, every hour after the first 4th or 5th session would be painful for the lawyer, emotionally. By the 10th, he is complaining to the parties that they are wasting everyone's time [theirs and the lawyer's]. He probably would rather be doing almost anything else, but is committed to the project. By the 15th session, the lawyer would probably rather have a root canal. How much less interested will he be if he signed on for a flat fee?
I don't even pretend to argue that there aren't lawyers who waste their client's time by failing to look for a solution to their client's problems. In fact, I regularly rail against the conduct. Sometimes it is a personality problem, sometimes greed, and sometimes the need to prove to the client that he will do whatever the client wants - argue the same losing argument over and over again at every hearing, for example, so the client knows "he cares".
Most good lawyers I know are happy to have cases resolved. Depending on the financial issues, they may need to do their due diligence [a deposition and some discovery, maybe more investigation if they feel they aren't being told the truth]. Spending hours deposing the opposing party on the records they use to prepare their budget is usually wasteful; arguing the same losing position at hearing after hearing is the same; objecting when the other side wants a hearing continued because your pleadings were served late is almost always a waste of time and money. When the lawyer loses these arguments, it is easy to blame the judge even though the outcome was predictable, and the cost of the case mounts.
It's amazing how easy it is for two lawyers looking for a solution to resolve almost every problem, and how hard it is to get a few lawyers to agree to the time of day.
A few make their reputation on arguing about everything - client's don't realize the losing arguments aren't the fault of the judge or the lack of ethics on the part of the opposing lawyer. When the equity from the house has gone to pay the lawyers, they blame everyone but themselves - yet they are the ones who tolerated the litigation. Part of the lawyer's job is to manage expectations and manage the client's emotions that lead to more arguments.
Yes, the lawyer can take advantage of the situation. It is the client's responsibility to control the fighting and push for an agreement.
My client's aren't usually wealthy; they care what is being charged. The NYT article was generally aimed at lawyers representing business clients who may simply factor in the cost of lawyers without regard to whether they are getting their money's worth. Family Law lawyers are rarely in the same position.
Bottom line, control the case, adopt reasonable expectations, and decide whether it is worth doing the work for which you are going to be charged.
