Lawyers usually charge by the hour, or sometimes will quote a flat fee for a specific type of matter. Both of those have their place, and you may choose to go that route. A monthly legal subscription service is something a little newer to the table. Let’s weigh the pros and cons of each type of payment arrangement.
Hourly Billing
Pros for the Lawyer
- If a matter gets complicated, they are able to charge for all the time they put into it.
- They know they’ll be able to bill for the hours they spend on a matter.
- It’s what they are used to.
Pros for the Client
- Might save money compared to a flat fee or subscription, if they only have a single straightforward matter they need assistance with.
- Is the most cost-effective and/or only option for large legal issues.
Cons for the Lawyer
- A lot of focus on billing, instead of practicing law.
Cons for the Client
- Lawyer’s focus is on billing hours, in addition to assisting the client.
- The client sometimes will be surprised with a large bill from his/her lawyer.
Flat-Fee Billing
Pros for the Lawyer
- If a matter is simple, they are able to profit more money, because their flat-fee is geared towards an average or more complicated matter.
- The lawyer knows how much money they are going to make for the given matter.
Pros for the Client
- Might save money compared to hourly billing, if they end up having a matter that ends up being more complicated than originally thought.
- The client knows exactly how much money it is going to cost.
Cons for the Lawyer
- They might make less money on more complicated matters than if they would have been billing hourly.
Cons for the Client
- If the matter ends up being complicated, the client may not have the funds to pay for as much attention as it deserves.
- The relationship with the lawyer is more transactional, instead of ongoing advice.
Subscription Legal Service
Pros for the Lawyer
- The lawyer feels like they are “part of the team” in helping a client succeed.
- The income stream is consistent.
- They can focus on practicing law, instead of splitting their time with billing administration.
- Clients will come to them with proactive matters, instead of just when they run into trouble.
Pros for the Client
- Business clients feel like they have an attorney on staff that they can go to with whatever questions they have, without having to worry about how much it is going to cost them.
- They can be proactive on small things, so they don’t get themselves into trouble in the future.
- They have an ongoing relationship with their attorney, more like a business advisor.
Cons for the Lawyer
- They may have clients “overutilize” the service and would not make as much money as compared to hourly billing.
Cons for the Client
- They may be disappointed if they have something come up that is outside of their subscription plan and need to be charged more.
- They are paying for the potential to use those services. If the client does not utilize that potential, they may feel the subscription is not worth it.
So Which One Is Best?
Well, as you can see, it depends on the situation. If you’re looking more towards the traditional billable hourly service, check out Burke Costanza & Carberry’s main offerings.
If you’re interested in what a small business legal subscription would look like, check out the different subscription options.
Not sure? If we’re available to chat right now, you’ll see an icon in the bottom-right corner of your screen. If not, shoot us an email at hello@steadfast.law or give us a call at (219) 682-0200.