Confessions of a Happy Lawyer

True confession: I’m a happy lawyer. I know, I know, those are hard to find. Admittedly, it wasn’t always this way. I spent my first five years in practice struggling financially under the weight of the broken hourly-fee billing model inherited from our forefathers. As a result, I was broke, frustrated and on the verge of giving up.

So what changed?

It all goes back to last May. I was almost a year out of personal bankruptcy at this point. I had discharged a mountain of debt, been humbled, but still lived in constant fear of not being able to make ends meat every month. I billed out at $250/hour and took on many projects using “value billing,” yet my income was not consistent, predictable or secure. Because of this, I couldn’t plan. Nor could I hire an assistant to help me be more productive because I was afraid I would have to let that person go the next month. I was miserable, so miserable that I even considered getting a J-O-B.

I know many of you are in the same position right now.

And perhaps falling back on big law may be a legitimate option for you, but understand, I am not employable. I HATE working for other people. It crushes my spirit, and I value my time with my wife and kids too much to trade my life, and theirs, for a few bucks.

Not to mention, we are all lawyers here. A law degree can get you many things, but at a bare minimum it should give you options. As lawyers, you and I should not be forced into a career path we hate in the name of “getting by”. On that premise I knew there had to be a better way.

So last May, I received encouragement to try some form of a flat monthly fee billing arrangement. Like anyone else new to the concept, I had the normal fears and questions. Wouldn’t I be leaving money on the table? What if someone called all the time and sucked all my time into a rat-hole of unprofitability? What if I did a bunch of work upfront and the client canceled the contract? What if? What if? What if?

Yet clearly my way of doing things wasn’t working and I had nothing more to lose in trying something new. So it was last May, in that moment of boldness that I crafted a matrix of flat-fee service packages and committed to giving it a shot.

The end result? During the last two weeks of May 2009 I had six clients sign up for year-long flat monthly fee engagements at levels ranging from $250/month up to $750/month. The course of my life changed in that two-week span.

My office overhead was covered for an entire year. I could sleep again. And best of all, at the end of those two weeks, I could look at an Excel spreadsheet and start to plan without laughing at myself for making up the top-line numbers out of hope and desperation alone.

Yet it didn’t stop there. Today I enjoy a thriving practice that meets all of my wants and needs (personally and professionally). I have revenue on my books each month before I take a single new client. I hired an assistant to handle scheduling, and a full-time associate to handle drafting, which gives me more time to focus on engaging and counseling clients–by far my favorite part of the job.

I can now take time off without worrying about missing billable hours. I can have a meeting with clients that does not feel rushed or bound to a time clock. I can now say “no” to clients that don’t feel right, and I can say “yes” to clients who are onto something powerful and don’t have the money to pay me right now. I’ve hired the help I need and feel good that I’ve been able to give people jobs they love and from which they can learn a great deal.

So what can you do to experience the same level of freedom in your small or solo practice? Here are a few quick “nuggets” I’ve picked up along the way:

  • Don’t be afraid to step outside the box- Fear almost held me back from making the best decision in the history of my practice. You cannot keep trading dollars for hours and expect to get ahead. It is just not possible, or feasible for your business.
  • Hourly billing is NOT an option- When I finally made the shift to flat-fee billing, I took hourly billing off the table. It was not an option for my clients, and because of that, they never missed it.
  • Variety is key- For best results, create a variety of flat-fee options from which your prospects can choose. Popular levels include $250 per month, $750 per month and $1500 per month packages. It’s a psychological ice-breaker but it also helps your clients feel part of the process in choosing a custom package to meet their unique and particular needs. Use those plans as guidelines for engagements, not checklists. Follow your gut and always be in a position of providing more value than promised.

(photo: Eversheds LLP)


  1. Avatar Sharmil McKee says:

    Good ideas! I hadn’t thought to create monthly fixed-fee plans. I caution you to get a big first payment, though (depending on your client-base). My firm is flat-fee also, and we offer payment arrangements of monthly payments. But some clients miss payments, and creates a small problem for us during litigation of basically working for free. So, I am now testing an alternative payment plan where the due dates are coordinated with dates where we can withdraw from the case easily. It’s still a work in progress. Thanks for sharing your ideas.

  2. Avatar Sean Nichols says:

    I believe Lawyerist’s readers would be helped by having someone explain, more specifically, what about the hourly fee arrangement hurts small practice attorneys. I have my own ideas as to why the traditional billing method hurts attorneys, but being in law school, cannot be sure of why the traditional method hurts practicing attorneys.

    Some things that would help are: Personal anecdotes, the “defining moment” when someone decided to switch from an hourly fee arrangement, the reasons why it doesn’t work for clients, and etc.

    Disclaimer: I’m not a fan of traditional hourly fee arrangements.

  3. Avatar Nena Street says:

    This is a superb article, Kevin. Welcome to the Lawyerist community!

  4. Sam Glover Sam Glover says:

    Sean: It isn’t so much that hourly fees “hurt” as fixed fees—especially recurring fixed fees—have some clear advantages. For example, with hourly fees, you can never bill for value, only time, and you can never make more than your waking hours times your hourly rate.

    With fixed fees, you can focus on value, not time. You do not need to worry about the self-doubt that leads lawyers to reduce their time even before the client protests, or the “padding” that goes into many bills. The bill is what it is, without regard to time spent on the case.

    And never underestimate the power of reliability. Knowing that you will be receiving $200/month, every month, is more valuable (to me, anyway) than the chance at billing $3,000 on a case that could also settle tomorrow.

  5. Avatar Kevin Houchin says:

    Sharmil, I exclude litigation and out-of-pocket costs from the flat fee. All the flat fee work I do is transactional and it’s required that they pay via auto-billing to a credit card to have the flat fee engagement. That way I don’t have to worry about them forgetting to send a check, it also cuts down on the book-keeping fees.

    Sean, great idea for my next contribution. :-)

    Nena, thanks! If feels good to be here.

    Sam, thanks for sharing. I’ll expand on my experience relative to those issues in my next contribution. I don’t do litigation on the flat fee, as mentioned above, so my focus will be on content for those of us that never aspired to be in the court room.

  6. Avatar Harry Styron says:

    It will be interesting to see how this works out over time.

    Since starting the practice of law in 1983, I’ve tried a lot of different strategies for managing cash flow and controlling expenses in a variety of law firm settings.

    All I have learned is that nothing works forever or for all clients. Several simultaneous things are at work, which do not remain in harmony, such as:

    the types of legal work in demand
    the life cycle of each clients’ business
    the local and national business cycles
    the client mix
    the lawyers’ changing legal and personal interests and priorities
    changes in the lawyer’s health and family life

  7. Avatar Boyd Butler says:

    Subscriptions allow you to leverage your skills. You can only work 40
    hours a week so it makes sense to earn as much as you can in that
    40 hours. Never trade time for bucks. Trade your skills.

    Subscriptions are also less risk for the client. It’s a known fee,
    they can call when they have a problem and if they don’t get
    what they want they can

    Offering at levels of $250, $750 and $1500 is artificial pricing. I guarantee you’d be better off charging $447, $947 and $1447. Try it out. And let me know if you want
    the reasons!

  8. Sam Glover Sam Glover says:

    Kevin, we litigate on fixed fees, as well (just not included in the monthly fee). I find I am pretty good at estimating an appropriate fee, and using fixed fees allows us to take a big-picture approach to the case. For example, we may want to spend week on a motion for summary judgment—even if the fee is out of proportion to the work—so that we can add that memorandum to our forms bank

  9. Avatar Josh Clover says:

    I litigate primarily real estate and commercial disputes with a smattering of family law. Most of my clients are individuals or small, closely held companies. Over the years I’ve become fairly certain that most of my clients would be open to, and some might even prefer, some sort of fixed fee arrangement. I generally detest the billable hour. (Which may have something to do with having practiced for a short time in a big firm where I was expected to crank out 2,000+ a year.) I’ve come up with a number of ideas for how to bill litigation on some sort of fixed fee basis.

    However, I keep coming up against at least one conceptual road block. Most of my work allows for the recovery of attorney’s fees. At least where I practice (Texas and occasionally various federal courts), courts rely on the good ol’ load star method of determining whether your fees are reasonable and necessary.

    Here’s my fear, over the course of a piece of litigation I’ve racked up X dollars in fees through some sort of fixed fee arrangement. But, that amount ends up being different than my hours multiplied by a reasonable hourly rate. As the client is sitting their watching, he’s thinking he either got a really good deal or got screwed, depending on whether what he paid is more or less than what the court determines is “reasonable and necessary.”

    I don’t mind taking the risk that I overbid or underbid the litigation. I do wonder what I’m going to say to the client who says “I paid you $10,000 for this, but the judge said only $6500 was reasonable and necessary.” Any thoughts. . .

  10. Sam Glover Sam Glover says:

    We do a lot of contingent-fee litigation where we track our fees for the lodestar analysis. It isn’t tracking my time that I mind; it is billing by the hour.

    Also, people do hybrids all the time (“you will pay me $50/hour, but I can seek my full, $350/hour fee if we prevail”). You could do something similar with a fixed fee (“you will pay me $10,000, but if my fee exceeds this amount using a lodestar calculation, I may seek the lodestar fee if we prevail”).

    As for the scenario where a judge “underbids” you, just remind your client that judges almost always cut fees. I would be shocked if you tried to get a $10,000 fixed fee and actually got it.

  11. Avatar Kevin Houchin says:

    Thanks for all the great input Sam. I don’t do a lot of litigation, so you’re providing some really valuable input. We had some people on the Space Between Center intro call (replay available) asking about flat fees in litigation too. There’s a lot of interest in this topic.

    Boyd, I’d love more info from you. Of course I understand that ending the prices in 7 and under the 50 is a good sales technique – but I believe those numbers are just as “artificial” as $250, $750, and $1500. People know when we are making estimates. To me, it feels more “authentic” to just call the number what it is – $250, $750, $1500. And, I’ve not had anyone run the other way because it wasn’t $247, $747, and $1447. :-) Those numbers seem more “retail”… and again, I’ve not had any lack of success with my round (what I consider transparent) numbers.

    Honestly, I’m struggling with that concept a bit. What really IS “authentic” and how to balance that against proven sales techniques…?

  12. Avatar Boyd Butler says:

    Kevin on pricing. You used examples of lower prices! I used them of higher prices. Meaning is there a difference between $250 and $447 – to you that’s a huge difference. But to the client, maybe not. Because the psychological barrier is $500 not $251.

    I have a client that was charging £250 for websites (that’s around $300).
    I told him to charge £477 (around $550). He made more sales at the higher rate. Reinvested around $100 in marketing on generating leads at $30 each and converting 1 in 3 of the new leads.

    The company is

    I believe that testing pricing is always advisable on a regular basis.

    As long as you are offering value, can prove it with testimonials and other proof, (use lots of it) then you will make more money by continually pushing.

    I’ve got stuff like this on my website in the UK…most of it is applicable to the US and all businesses. Feel free to sign up and visit – (not intended as spamming this site just feel that I have a lot to offer from over the water)

    Cheers and good luck

  13. Avatar Johnny Fuery says:

    I do information technology, not legal, but I’m here because we service attorneys predominantly. My firm struggles with this question on the other side of the fence on almost a daily basis.

    That being said, this point of view carries over very well to other service-oriented professions, like IT..

    I found the “don’t offer an hourly rate” particularly poignant. I’ve been offering various fixed-price service packages at several price levels for many years now and still had clients opt for the “pay as you go” billable hour model. Perhaps removing the choice is the key.

    Obligatory plug: We do case management software in addition to on-site support (in California). Check out MerusCase, the Superior Case Management System.


  14. Avatar Rachel says:

    Hello Mr. Houchin,
    I am currently a high school junior in Cupertino, CA. I’m thinking about going for law for my major, but I’m still skeptical of how happy I would be in life as a lawyer. Situated in the heart of Silicon Valley, I go to a VERY competitive and distinguished public school that has curriculum similar to that of college. I am wondering how college and law school for you was. I know that schools such as Ivy universities are extremely tough, but how tough, exactly (given that I go to a pretty “tough” highschool myself)? And how happy, to your knowledge, are most lawyers you meet? Is life usually stressful and all-work, no play? I have always been interested in speech, debate, discussions, etc. and still have yet to decide my major. Could you please explain to me, however you can, just how life is as a typical lawyer? And, as a practicing and experienced lawyer, tell me which minors (and skills) are most helpful to most lawyers (possibly patent law, as I live just minutes away from large companies such as Apple, Oracle, Google, etc- I’m still new to this, however, so I’m still exploring the different types of lawyers)?

    Also, I understand that my questions may be somewhat vague, so difficulty answering them is completely understandable.

    Thank you very much! I appreciate any amount of time and effort answering this. (:
    – Rachel

  15. Avatar Lawgirl says:

    One of the issues I am curious about is how you get clients to pay you every month or how you quickly withdraw once they stop? I work solely in family law, the major problem is that once the retainer runs out, 90% of the time the client quits paying or start paying a ridiculously low payment per month (ex. $40) per month. Eventually these clients end up filing for bankruptcy and having our unsecured debt discharged. How do you get your clients to actually pay you? How quickly do you withdraw? More information in this area would be extremely helpful. I love the idea, I am simply unsure about how to implement the system properly.

    • Avatar Sam Glover says:

      Accept credit cards.

      And if you aren’t paid, withdraw. Make it clear to your clients that if they are more than 10 days late on a payment, you will immediately withdraw. Better yet, write it into your retainer that they may terminate your relationship at any time by not paying your invoice. If they are late, they are indicating that they’ve fired you, and you must then withdraw.

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