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1450 Boyson Road Suite C-2A Hiawatha, Iowa 52233     319-389-1889

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Flat Fees and Cost Savings Questions from a Prospective Client

By David Cmelik
I had a call from a prospective client over the weekend in which I spent quite a bit of time over the phone directly with the defendant. It was a drunk driving case and he was deciding whether to hire a medium size firm or whether to go with my solo practice to represent him in a DUI defense locally. As an aside, most attorneys have layers of gatekeepers to field prospective client calls and get clients in to the office face-to-face. In contrast, prospective clients are usually surprised to get an attorney on the phone initially. I pride myself on my accessibility and I assert that it sets me apart from those who would separate themselves from clients with paraprofessionals. By the time a larger firm gets a prospective client into the office to "wow" them with the trappings of their glass-laden offices, they have taxed both their time and patience to the point of exhaustion. Moreover, I believe the trappings of larger firms require clients to pay extra, hidden cost buried in overhead to be distanced from their attorney. It's simple arithmetic. Every cost is passed on to the consumer in business. So back to the phone call. The prospective client had been told by at least one law firm that it would represent him for a “flat fee” and that he was guaranteed to pay no more than that amount. First, strictly speaking, flat fees in Iowa are not legal if they are not partially refundable. A flat fee must be structured such that a client who chooses to discharge the attorney before disposition, he or she may get at least a partial refund of the unearned fee before completion of the case. It’s difficult to know exactly how to structure the fee to make sure the client gets back the right amount. Flat fees are fraught with complexity for this reason and I know few lawyers who use them. Moreover, I don’t quote flat fees because every case is different and I would have to charge each client more than I want to in order to cover the most protracted, worst case scenario. Thus, it was no surprise to me that I found the so-called flat fee amount quoted to this prospective client to be twice the retainer amount I would charge a defendant to begin work on the case. Because all cases are different, but most cases resolve with a plea agreement, I believe my retainer amounts to be fair and my accounting process to be thorough and informative. I account for time spent down to six minute increments, or one-tenth of an hour. Every client gets a monthly accounting of this work before I draw down on amounts in trust. It’s important to note here that a retainer is not a flat fee. It is an amount placed in trust and drawn upon as work is completed. A criminal prosecution is a process that occurs over a period of months and my clients are part of that process and receive a regular monthly accounting of the work that I do. I set retainer amounts and hourly rates reasonably to estimate what is necessary to begin work on a case and generally speaking that experience is a fairly accurate barometer on those initial requirements. By the time a case is finished, some clients get a refund; others pay an overage. Protracted cases require a face to face discussion to go over options and additional retainer deposits and I always make clear up front that may be the case (the flat fee above is designed to make sure these exceptional cases are “covered” by the flat fee). Most clients never have that discussion with me because it is the exception instead of the rule. I’ve represented defendants in cases where they have been acquitted or been offered reduced charges. I will gladly take a case all the way to jury trial. But it wouldn’t be honest to suggest that such cases are anything but the exception. Yet, flat fees are designed to capture most or all of the cost of going to jury trial in a first time OWI offense even though over ninety-percent resolve in plea agreements. Second, a flat fee may or may not cover the cost of hiring an expert in a complex case. If the Defendant seeks to hire a court reporter for depositions or an expert witness like, for example, a toxicologist, his or her fees would be excluded from a flat fee arrangement that only covered a flat legal fee. Third, the prospective client asked whether I had a staff to defray his costs by having a lesser paid paralegal or secretary complete some of the busy work, like making copies or sending letters. This was counter-intuitive to me. Additional staff raise overhead expenses and further raise the billable rate. Instead, I make heavy use of technology to reduce my hourly rate. That being said, I generally don’t bill clients for standing at the copy machine. I was pleased to field this question because I’ve never heard a prospective client ask it before and I suspect it is a talking point for bigger firms who get asked whether they pad fees to pay higher overhead. The fact is that solo practices are leaner than their larger counterparts and can pass those savings on to clients in the form a lower hourly rate—and thus an overall savings. Simply put, a large staff doesn’t defray costs; it adds to them. If you’re in need of a Johnson or Linn County OWI (sometimes called a DUI or DWI in other States) please call David A. Cmelik Law PLC at 319-389- 1889 or visit www.daclawfirm.com to set up an in-person appointment for a free ½ hour initial consultation.