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Should Attorneys Charge Hourly for Estate Planning Advice? – Boston

By Harry S. Margolis

Many, if not most, attorneys charge by the hour for their work.  So clients pay a fee based on the time spent times the hourly rate, which usually is higher for more experienced attorneys — who should be more efficient — and lower for those who are less experienced.

Does this make sense?  Not from the client’s point of view and probably not from the attorney’s either.  Clients don’t like hourly fee arrangements because they can’t know ahead of time what the work will cost and it encourages inefficiency — the longer it takes the lawyer, the more she’ll be paid.

There are a lot of problems with hourly fee arrangements for attorneys as well, including:

  • They can only make more money by working more hours.
  • Or they can raise their rates, but the hourly rates of most lawyers already appear very high to most consumers.
  • Billing by the hour discourages communication with clients, since clients often hold back from contacting their attorneys because of the cost.  They may also resent their lawyers contacting them for the same reason if they question the need for the call or e-mail.
  • Finally, as an attorney, I can’t think of much that I like less than having my bill challenged by a client.  It means that the client either is questioning my efficiency (and who is always operating at top efficiency?) or my honesty.

For these reasons, our firm tries to avoid hourly fee arrangements as much as possible.  Doing estate and long-term care planning, we can usually assess how complicated and time-consuming a project will be and quote a flat fee accordingly.

Sometimes we get “burned” when the work becomes more complicated or time-consuming than we anticipated, and sometimes we make a profit above what our hourly rate would be when the work goes more smoothly than anticipated.  Perhaps it would be fairer to individual clients if our fees were higher in some cases and lower in others, but most clients would prefer the certainty of knowing the fee upfront.

Where matters are more unusual or in cases where litigation may be involved and we can’t anticipate at the start how vigorously the other side will contest the issue, it can be difficult or impossible to quote a flat fee.  In those cases, we often do work on an hourly basis or on a partial contingency where our fee is higher or lower depending on our success in achieving the client’s goals.

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