Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Accounting and Financial Planning for Law FirmsKickerFeaturesTopicsLaw Firm ManagementSectionsNewsLJN Newsletters

Budgeting Is the Key to Effective Alternative Billing

By Ed Poll

ABA Model Rule of Professional Conduct 1.5 states that lawyers cannot charge an “unreasonable” fee. Clients increasingly say that traditional billing by the hour for legal services is not particularly reasonable, because such billing does not convey either the specifics or the value of what their lawyer did for them for the billed hours. That has opened the door to the numerous alternative billing methods that firms use today. There is nothing magical about hourly rate alternatives ' they all seek to achieve the same thing. Rather than setting price by a standard unit or result, billing alternatives focus on actions taken to benefit the client.

Billing alternatives can include a blended hourly rate, a contingent or percentage fee, a flat fee, or some combination of these and other approaches. No matter what alternative is used, it should reflect a highly interactive process: The lawyer takes a direct financial stake in achieving the desired results, and the client plays an active role in deciding whether those results have been met. No lawyer wants to lose control and direction of an assignment, but absorbing a degree of risk and accepting informed client judgment are often essential elements of a strong and growing lawyer-client relationship. The best way to balance the interests of both sides is by developing a budget at the start of an engagement where alternative billing is used.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Coverage Issues Stemming from Dry Cleaner Contamination Suits Image

In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.