Flat Rate Billing Is a Pricing Method Where You Charge a Single Fixed Rate for a Service
Traditionally attorneys have either billed hourly or by contingency. As Colorado attorneys have evolved, the third type of billing has started to become popular. This new style of billing is the flat rate. A flat rate bill is where the attorney will quote the client for a service in advance and does not bill the client hourly or take a portion of any settlement that they might win while performing the service for the client.
Colorado Lawyers have shied away from flat rate billing in the past because it is often difficult to predict how long a client’s service might take. If the attorney estimates wrong, they may need to spend a lot more time on a flat rate matter than they anticipated or drastically overcharge if the matter ends up being more simple than they expected.
Flat rate billing has increased in popularity recently as a way to give more people access to legal services and to keep costs down for clients. Clients also appreciate knowing their bill ahead of time so there are no surprises when the bill comes.
Computers have increased attorneys’ ability to charge flat fees because, with computers, an attorney can keep more template-style documents ready for common issues they face for their clients. The closer two issues are to one another, the more likely an attorney can bill using a flat rate.
Flat rate billing works best in situations with high predictability. Low complexity estate planning, wills drafting, new business formation, and drafting simple contracts are all examples of the type of work where an attorney can predict the amount of time that they will spend on a specific task and be able to fairly pinpoint the cost of their services before taking on a client.
Flat-rate billing does not work well in litigation or other complex legal situations. Those situations are too unpredictable for the Denver attorney to know how long it might take them before they begin their work. Flat-rate billing has also started making its way into criminal law to some extent, but with each case having different wrinkles, Denver criminal attorneys are still hesitant to flat rate bill.