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Can a Single Fee Agreement Combine Flat Fees and Hourly Fees?

In flat fee cases, sometimes the attorney wins and sometimes she loses. But sometimes an attorney stands to lose much more badly than others. Take a family law or immigration matter, for example, where the client is represented on a flat fee and then commits a criminal law violation. May a fee agreement specify that work beyond a specified scope be billed at a flat rate? In other words, may a lawyer combine flat fee work and hourly work in a single fee agreement?

A rigorously scientific survey conducted over lunch (n=6) suggests the answer is no. (In other news, the bánh xèo – Vietnamese savory pancakes – at Long Provincial are outstanding.) Several experienced colleagues, who regularly use flat fees, all believed that a single agreement may not combine a flat fee with hourly engagements. We’ll call these “combined fee agreements.”

The survey results caused me to panic, since I’ve been using combined fee agreements in two ways:

  1. Multi-stage cases. We’re an immigration firm. Bringing our foreign clients into the U.S. generally involves a multi-stage process: initial petition followed by application to the U.S. State Department. Because the second step involves substantial variance from case-to-case, we often bill the first step on a flat-fee basis and the second step hourly.
  2. Hedging. We also use combined fee agreements to plan for the possibility a case will become more complex than anticipated. These cover primarily new factual scenarios such as criminal violations by clients and changes in law. “Oops we didn’t realize this was a tough case” is emphatically not a basis for kicking-in hourly billing.

If you too use combined fee agreements, however, there is no cause for panic. In fact, Comment 16 to RPC 1.5 explicitly acknowledges that combined fee agreements are permissible, subject to red tape. Here’s what you need to keep in mind.

 

[This post first appeared as a guest piece for the Washington State Bar Association’s Side Bar blog]

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Greg McLawsen

I’m proud to be the founder of Sound Immigration. My job is to work behind the scenes to ensure our clients have an outstanding experience at our firm. I’m passionate about reinventing the practice of law to make it work better for those we serve. I work hard to identify the best available technology to make our firm convenient for clients. I look to other industries, like real estate and the restaurant business, to learn about practice that will help serve our clients better.

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