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Accounting and Financial Planning for Law FirmsKickerFeaturesTopicsLaw Firm ManagementSectionsNewsLJN Newsletters

Yes, We Can ' Raise Fees

By Ed Poll
July 29, 2010

After most firms have faced two-plus years of pressure by clients to cut rates, the thought of increasing fees seems a distant memory to many. In today's tough economic conditions, few lawyers at any size firm likely are considering an increase in their fees. This is, of course, a matter of economics. The seller of any service must understand costs, set profit targets, and gauge market demand. The decision ultimately is a matter of the seller's choice ' and the market's reaction.

This reasoning applies to lawyers and law firms, as it does to any other kind of business entity. A lawyer in any given area of practice at any given firm can charge for services at an hourly rate, a flat fee, a contingency fee, or a mixture of these and other billing methods. Moreover, the amount of those charges can vary widely. The only requirement, according to Rule of Professional Conduct 1.5 (“The Code”), is that “a lawyer shall not make an agreement for, charge, or collect an unreasonable fee.” The Code defines “reasonableness” by such factors as:

  • The time and labor required;
  • The novelty and difficulty of the questions involved;
  • The skill requisite to perform the legal service properly;
  • The customary local fee for similar services;
  • The amount involved and the results obtained;
  • The time limitations imposed by the matter; and
  • The experience, reputation and ability of the lawyer.

What Is Reasonable?

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