Background

Much attention in legal circles has been and is being given to the notion of "value billing". But what does this really mean? Research suggests that what it means to clients ... to you ... is roughly the following:-

This is a worthy goal, but: easy to state, difficult to achieve. Difficult, because the matter is so very subjective. So how is the goal to be achieved?

An Approach

One way is for the lawyer to recognize and accept that different activities undertaken to achieve a successful result contribute in different ways to that result. For example, the simple typing of documents or the undertaking of raw legal research are important to a good result, but they are not as valuable as DRAFTING or "authoring" the work that is typed or the process of ANALYZING the raw research. Another way of saying the same thing is that they are much easier to achieve and require less effort and skill than the more complex, more valuable activities.

Consequently, I have spent some time analyzing the various activities that, together, make up the factors involved in the creation of legal work product, and I have concluded that for all practical purposes there are at least five value-activity categories. If, then, each category of activity is weighted and valued accordingly, the final result should be the ability to calculate a global or "blended" fee that adequately rewards me for my efforts and, at the same time, represents a more objective notion of true "value" to you, the client.

The Five Categories

1. Basic

   elementary but essential drafting and copy production (e.g., ordinary correspondence without skilled drafting); simple communications by telephone; travel; etc.
    

2. Methodical

   raw legal research (e.g., identifying and assembling basic materials, including initial cursory review, but not analysis); file organization and re-organization, etc.
    

3. Fundamental

   attendance at meetings and telephone conferences to consider basic matters and taking (and discussing) instructions; initial review of agreements and other documents; opinions on simple matters of little complexity; drafting and reviewing simple documents; general preparation for meetings, closings, etc.
    

4. Skilled

   in-depth analysis of research materials and agreement provisions; consulting and advising on specialized matters; considering and preparing opinions on legal issues of medium complexity; early-stage negotiations on issues of medium contentiousness; completion of basic transactions and reporting thereon; drafting and reviewing of legal documents of moderate complexity, etc.
    

5. Extraordinary

   consulting and advising on highly specialized matters; considering and preparing opinions on legal issues of considerable complexity; "heavy" negotiations; completion of complex transactions and reporting thereon; drafting and reviewing highly complex legal documents, etc.

Each category has its own particular "standard hourly rate" set out in the accompanying schedule. But, just as justice must be tempered with mercy, this approach is not an end in itself. I must still apply a healthy dose of common sense to the final total. For example, if an expected result has for some reason not been fully achieved, I will ... before rendering a final account ... carefully and objectively analyze the reasons. If it appears that my approach to the problem or an element of "quality control" was somehow lacking, a reduction will be applied or perhaps no fee at all imposed. On the other hand, if an extraordinary result was achieved largely because of the extra-special skills and expertise which I bring to the matter, a "premium" or surcharge may be in order. In either event full and frank discussion with you, the client ... before the final bill is rendered ... is indicated.

I am convinced that the Flexi-Fee^TM approach will have a substantial dampening effect on your total legal expense budget. Legal projects may be completed for as little as one-half to two-thirds of the probable cost were the work to be done in a different environment. This is due to a simple fact: the necessary resources required are brought to the table in the lowest overhead environment that is consistent with creating high-quality work product delivered on a timely basis. This in turn is accomplished by the application of leading-edge (but not "bleeding-edge") technology and little or no additional labour component other than one experienced lawyer.

In order to maintain the highest level of quality productivity at the lowest possible cost, a reasonable level of commitment and co-operation is required from my clients. Simply put, in order that I may maintain the highest possible level of effort and concern for my clients, I must have no worries about collecting my fees. Carrying receivables means wasted time and wasted cost; it means tampering with my low-overhead environment to the detriment of everyone - my clients and me.

In fairness, I believe that the usual approach should be as follows:-

1. At an early point in our relationship, we will jointly establish a dollar budget for the anticipated work to be done, whether on a project or annualized basis. If project basis seems appropriate, a time estimate for completion of the work will also be agreed upon.

    

2. Once the time/money budget is agreed upon, we will further agree upon the amount and timing of retainer instalments on account of fees and disbursements to be paid such that 100% of the budgeted amount will be in hand when the project ... or the year, as the case may be ... is about 80% completed. Such retainer deposits are always held in my trust account to your credit until bills are issued. My normal billing cycle is monthly, unless we should make other arrangements.

This approach will go far to ensure that there is a close correlation between the point in time that the service is actually rendered and the point in time when its value is paid for. It is my hope that this approach will be perceived as having a very high degree of fairness for both of us - a true "win-win" proposition.