HOW WE CHARGE
A word from Mark F. Weiss
It’s not likely that you get up in the morning thinking about legal fees. But sometimes you have to, so it’s better to talk about them up front.
Most law firms and, I’d guess from practicing law since 1979, nearly all lawyers, don’t like to talk about fees. Note that I didn’t say that they don’t like fees, it’s the “talking about them” part that they avoid.
In my personal dealings, I’ve been the client of many lawyers. None, zero, zilch, have ever had an open, up front discussion with me about fees. I hate it, so I know how you feel.
So, let’s have a discussion about legal fees. Let’s talk how our firm will charge when you become our client, and what choices we may be able to offer you. And, importantly, how in many cases we’re willing, able, and eager to share risk with you when you become our client.
"Skin in the Game" Fees
In many circumstances, we’re able to offer you an arrangement in which a significant part of our fee is at risk and dependent upon the result that we achieve. I call this having "skin in the game," and many clients like the idea.
This type of arrangement works only if there’s a significant and definable goal that we can both agree on. For example, it could be closing a certain type of deal, or it could be achieving a certain level of stipend support in a hospital contract negotiation, or it could be, well, many things.
For example, the leader of a large hospital-based physician group came to us in connection with the negotiation of a very significant exclusive contract. The group had a long history with the hospital, but times were tough for both the group and the hospital due to a significant worsening of its payor mix. Declining collections plus the hospital’s geographic location made recruiting and retaining highly qualified specialists very difficult. The group needed to significantly increase stipend support in an economy in which stipend support was going down, not up.
We crafted an arrangement in which we shared significant financial risk with the client: a combination of a significantly discounted hourly rate plus a percentage of stipend support over a clearly defined target. The client obtained a spectacular result and we shared in the upside. However, the outcome could have been different, and certainly no guarantee could be made to the client (or to any future client) as to any outcome. But, if the target hadn’t been reached, the total fees incurred by the client would have been limited by the significantly discounted hourly rate.
If there is a way for us both to get a handle on what that “success” is, then there are different ways to craft a skin in the game arrangement. For example, it might involve a significantly lower hourly charge or an initial fixed fee, plus a bonus level recalculation if and only if the success goal is met. Or, it might be an initial fee arrangement plus a percentage of a certain pool of money or of a certain target amount. There are other alternatives, too.
I think you understand the point. These types of “skin in the game” arrangements have us sharing a significant amount of risk with you and they’re custom crafted for your specific circumstances.
In some events, we’re able to offer you a fixed price for either part of a project or for an entire project.
Some clients prefer a fixed price because it’s completely known in advance. However, others don't, perhaps because they believe that the matter will be resolved quickly or will die quickly. But, it's something that we, and many clients, consider as an alternative in situations in which the project, or an aspect of it, has clearly defined bounds.
For example, a client sought our help devising a strategy to approach a third-party in connection with a certain type of business arrangement. In return for a significant five figure fee, completely fixed in advance, we worked to develop the strategy and to help craft a proposal.
In this type of arrangement, you benefit from the fact that there is never a "clock running" and from the fact that you never have to make a cost-benefit analysis as to whether to call us to discuss the matter, and so forth. The risk of “fee overruns” is shifted to us. But so, too, is the fact that we might complete the project in a week and not your forecasted month or that the project might die an early death due to factors completely outside of our control. In any event, risk is shared.
The Relationship Method™ - Fixed Monthly Fees
In some very specific circumstances, we're able to offer you an alternative that we call The Relationship Method™.
This alternative is completely nontraditional, because it has little to do with “charging for services” and everything to do with establishing a relationship that delivers tremendous value to an entrepreneurial client.
Under The Relationship Method™, you have complete, unfettered, as-needed access to us in respect of a broad menu of services. This alternative includes access to “run things by us” or to brainstorm with us; in fact, when working with clients on The Relationship Method™ basis, we encourage frequent touch-base phone calls and emails – it’s a central part of offering you the highest value.
The Relationship Method™ is usually structured on an annual commitment basis; however, at the beginning of a relationship the commitment is generally for 6 months to allow you and us to each make sure that it’s a good fit. The access fee for The Relationship Method™ is determined specifically based on your needs.
For example, a large medical group approached us in connection with providing all of their transactional and regulatory legal work and to serve as, in essence, their "outside general counsel" on a regular, ongoing basis. We took on those responsibilities for a mid-to-high five figure monthly, fixed subscription fee.
The structure of The Relationship Method™ offers you as-needed access – if you use it appropriately (measured from your perspective of creating a transformational future) The Relationship Method™ is a tremendous bargain in terms of the value provided.
As you’ve read above, in many cases we’re able to offer to share the risk with you on the basis of an alternative pricing agreement.
Yet in some cases, we just can’t figure out, or mutually agree on, how to charge on an alternative pricing method. And, in many other cases, clients actually prefer to hire us on an hourly basis. In those instances, we work on an hourly fee basis.
When we do, we send invoices to you twice a month, usually on the 1st and the 15th, so that you can always stay on top of all charges.
One More Point – No Hidden Charges That Look Like Expense Reimbursement
I haven’t seen a fax machine in a decade, yet some firms still charge $1 or more per page for them. Others charge for things like “copies” (of what?), for postage and even for FedEx. It’s enough to drive you crazy.
Unlike virtually every other law firm, we include our normal operating costs in our professional fee structure. That means no charges to you for things like phone charges, copies, FedEx fees, etc. The only costs that we pass through to you, and then only at our exact cost without markup of any kind, are filing fees and similar type fees, fees paid to third party providers, and travel expenses; even then, airfare is billed at the cost of coach fare regardless of the fact that we may choose to fly another class. (We’re first class lawyers, but you pay for coach!)