Alternative Fee Arrangement

Posted on: March 19, 2014

Alternative Fee Arrangements Available

At Schecter Real Estate Law, we can make alternative fee arrangements for our clients.

Alternative fee arrangements are essentially designed for clients interested in a fee structure other than fixed hourly billing. The types of fee arrangements vary and would be tailored to:

Some examples are:

Pure Contingency Fee

A pure contingency fee arrangement is where the lawyer receives a fixed or scaled percentage of any recoveries in a lawsuit brought on behalf of the client.

Generally, the client pays the costs of the litigation.

This type of fee arrangement can be suitable in complex commercial litigation cases involving significant monetary damages. Commercial contingency fee arrangements provide for a targeted, case specific approach that is suitable for large and small business entities.

For further information about contingent fee arrangements, click here to read A Consumer Guide to Client Rights’ Pamphlet issued by The Florida Bar.

Partial Contingency Fee

This arrangement combines hourly billing and a contingency factor, and the client and lawyer are sharing risks. The lawyer receives a portion of his hourly rate, plus a smaller percentage of any recoveries in the lawsuit.

This arrangement reduces the cost of the litigation to the client, while still aligning the client’s and lawyer’s incentives.

Fixed or Flat Fee

This typically involves arrangements where the lawyer handles a matter or group of matters for fixed sum. Fixed fees can be paid up front with an overall cap, or they can be a fixed amount per month with no cap. The specific arrangement would depend upon the nature of the matter.

This type of arrangement can be particularly attractive for large entities seeking legal representation for a specific scope of matters and want budgeting certainty.

Blended Hourly Rate

In this arrangement, instead of specific hourly rates for partners and associates which can greatly vary, one blended rate is applied to all hours billed on a matter, regardless of whether the work performed and billed for was by a partner, associate, or paralegal.

Fixed Fee Plus Hourly

In cases where parts of the lawyer’s engagement cannot be clearly defined, a portion of the services to be rendered may be charged on a fixed or flat-fee basis, and the undefined portions charged on an hourly rate basis.

Fixed Fee Plus Success Fee

This arrangement combines a fixed fee for the work performed by the lawyer, and a success fee in the event of a favorable outcome.

An example would be reduced fixed fee with a lower success fee in the event of a favorable outcome.

This arrangement would be used when there is a good understanding of the services required and the client and the lawyer are willing to share in the risks associated with the matter.

Percentage Fee

A percentage fee is based on a schedule of fees related to the amount involved in the matter being handled. The amount may be predetermined, such as a percentage of a loan amount being negotiated or the value of real estate being purchased. The percentage rate may be consistent or graduated.

Task or Unit-Based Billing

In this arrangement, identified tasks or components of the transaction are used to measure the fee. This arrangement may also be used in complex litigation or transactional matters where budgeting is required by the client.