Vote No In Texas

January 26, 2011 Comments Off

Medium Flat Rate Boxes and Flat Rate Envelopes

Flat rates. They work for the Postal Service and CDLs. Image by Aranami via Flickr

This is a horribly belated post. I meant to write it a week ago, but I kept getting sucked into my day job. Damn job. I hope Mark Bennett finds it in his heart to forgive me.

Texas is attempting to amend their rules for professional conduct to eliminate the ability of lawyers to charge flat fees for cases.

Criminal Defense Lawyers are hit particularly hard by this, as many of us manage our practices by using a flat fee structure.

Here’s how it works:

  1. Client has a problem.
  2. Client calls a lawyer.
  3. The lawyer analyzes the problem.
  4. The lawyer quotes a fee. This fee is based on the complexity of the problem, the time necessary to solve the problem, and the experience of the lawyer. The lawyer then uses this information to quote a flat fee to handle the problem.
  5. The lawyer is paid upfront, and the fee is considered property of the firm at that point.
  6. The lawyer is obligated to help with the problem as contracted.
  7. The client and lawyer never talk about money again, unless a matter arises outside of the contracted obligation.
  8. The funds are deposited in the lawyer’s operating account and are not held in trust. They are considered to be earned at that point in exchange for the obligation of the lawyer to continue working on the case until a conclusion is reached.

This is empowering to both the client and lawyer. The client knows that their case will be handled from beginning to the end. The client also knows that he/she will not have awkward conversations about money with the lawyer. The lawyer gets to move forward with the confidence that they can handle the case completely and without distraction. Managing money is made easier, and the lawyer can devote more time to cases instead of money management.

Don’t try to tell me that this is rectified by using an IOLTA. IOLTAs are a pain in the ass and require time that is better spent handling a client’s case. IOLTAs may work great for folks with large staffs, but the average CDL does not have a large staff.

For a majority of CDLs, flat fees are the bread and butter of our practice.

Now, Texas wants to take this away. I’m not a Texas lawyer, but I am a Kansas lawyer, and Kansas tends to follow trends from larger, more populous states. For this reason, I watch with concern.

Proponents of the change are largely followers of the billable hour. None are criminal defense lawyers.

Don’t believe me? Check out the following:

Mark Bennett: Here, here, here, here, here, here, here, and stay tuned, because he often posts updates on the referendum.

Scott Greenfield: Here.

Brian Tannebaum: Here. (this post has a particularly poignant example of a CDL charging a high fee for a case vs. a personal injury attorney taking their 30% contingency).

Jeff Gamso: Here.

Gideon: Here.

I’d love to speak at length on this, but my current caseload has forced me into a bit of a blog hiatus. Here’s the bottom line: Flat fees are fair and, in most CDL cases, the right way to do business.

So, to all my Texas lawyer friends: please vote no. Do it for those guys out there who really want to help their clients.

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