Friday, September 25, 2009

More on flat fees

Earlier today I posted a note about when is a flat fee earned (here). I then came across this short comment (here) regarding how disciplinary authorities deal with the issue of whether a flat fee has been earned. In part, it states:

"At present, if a representation ends early, the discipline system will often try to assess what portion of a fixed fee a lawyer earned (i.e., what is “reasonable”) by multiplying the number of hours worked by a reasonable hourly rate. Thus, if a lawyer who regularly bills $200 per hour collects a $5000 fixed fee to prepare a will, but spends only two hours on the will, disciplinary authorities may try to force the lawyer to refund the additional $4600. . . . .

"If disciplinary authorities continue to insist that a challenged fee will be assessed through the hourly billing prism, they will push for fixed fee engagements to be “lose-lose” engagements for the lawyer. . . .

"The limit on reasonableness of fees, commonly Model Rule 1.5, does not require such an outcome."

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