Lawyers have been relying on the billable hour structure for decades. Its history dates back to the 1960’s or earlier. It was common for a lawyer to keep track of the time spent working on cases to justify their legal fees.

As the legal profession grows more competitive, the billable hour is often used to measure the success of corporate attorneys. The more time you bill and revenue you generate for the firm determines your success. This pressure forces lawyers to put productivity over what’s best for their corporate clients, quality.

This shift has led many to speculate that the billable hour is on its way out of the law firm. While I won’t go that far, I do notice a growing number of attorneys offering corporate clients alternative fee arrangements.

Instead of relying solely on the billable hour structure, more and more attorneys are offering flat fees, hourly billing, contingency fee structures and retainers. Here are 4 of the most common:

1. Flat Fees

Flat fees are commonly used in transactional matters that require simple document preparation services (wills, contracts, agreements).

2. Hourly Rate Billing

Most Florida business lawyers provide legal assistance to corporations based on a fixed hourly rate. They track the time they spend representing the corporation, and send a bill to the corporate client monthly itemizing the legal services provided. A lawyer’s rate can range from $250 to $500 per hour or more, depending on the complexity of the legal matter, the lawyer’s experience, and extent of the legal services provided.

3. Contingency Fee

The contingency fee structure is often used by attorneys in costly and complex litigation matters. Under a contingency fee structure, the attorney is paid for the legal services he provides once the case is resolved and the settlement payment, if any, is received. The attorney receives a percentage of the settlement and is reimbursed of all expenses incurred on the client’s behalf.

4. Retainer

Attorneys that use retainer agreements generally provide legal services for a fixed hourly rate, but require that a retainer (lump sum) is paid in advance of performing any work. The retainer amount can vary due to several factors. Generally, the attorney holds the retainer in an escrow account and works for the client until the retainer has been exhausted, at which time the client must replenish the retainer to continue the legal services.

The business lawyers of Schecter Law offer alternative fee arrangements to accommodate our clients, including flat fees, hourly rate billing, contingency fee structures, and retainers. If you need to control legal spending and operational costs, you should hire a business lawyer that offers alternative fee arrangements.