Watch out for ethics bumps in flat fees

As alternative billing approaches go, flat fees have many fans. Clients like to know exactly what a particular legal service will cost and lawyers like to leverage experience they have gained in providing the same service to others. Sometimes a flat fee even lets a lawyer spend more time on a matter because there’s no concern that the client will feel the lawyer was trying to run up the bill by spending more time on legal research or clever drafting. Flat fees are also important for clients who are at a high risk of future nonpayment.

Read this article over at > Using reverse contingent fees for clients caught in the mortgage mess

One difficulty in representing clients who are “under water” on their mortgages is how the lawyer should get paid for his or her time negotiating a better deal for the client.

The client is heavily in debt, but if the lawyer shines, the client could save tens of thousands of dollars. In a listserve post this week, Professor Andrew Perlman asked: What if the lawyer was paid by taking a percentage of the money that the client saved through renegotiating the mortgage?

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