Vermont’s Rules on Handling Flat Fees Paid in Advance of Services Being Provided. With some wellness thrown in.

This post will eventually address Vermont’s rules on handling flat fees that are paid in advance of any legal services being provided.  First, however, I’ll share some thoughts on billing and wellness.

I’ll say again what I’ve said before: I’m a fan of the recommendations made by the Legal Employers Committee in the State Action Plan that the Vermont Commission on the Well-Being of the Legal Profession issued in 2018.  Outlined on page 11 and beginning in full on page 68, the committee’s recommendations provide fantastic and prescient tips for legal employers, both public and private, interested in improving the profession’s wellness.  A few months ago, I posted this endorsement of the committee’s recommendation that employers allow staff to set communication boundaries with clients and opposing counsel.

Another of the committee’s recommendations addressed billable hours.

  • “In firms that impose billable hour quotas on attorneys, assess whether and how that quota system may be contributing to unproductive competition, excessive stress, and unhealthy work habits. In large firms, an anonymous survey may be the best way to assess this issue. In smaller firms, it can be done through simple observation. If a quota system appears to be encouraging unhealthy behavior and excessive stress, modify it, eliminate it, or consider alternatives.”

That the billable hour impacts wellness is not news. In 2011, the State Bar of Michigan posted The Billable Hour and Lawyer Wellness.  Responding to the argument that the billable hour is unhealthy in and of itself, the author wrote:

  • “It is not. At its root, the problem is one of wellness. Unhealthy lawyers create and perpetuate unhealthy systems. Put simply, the way a healthy lawyer relates to billable hours is much different from the way an unhealthy lawyer does.”

More recently, Law.Com addressed the billable hour’s impact on associates’ health, Above The Law highlighted one large law firm’s attempt to improve work-life balance by reducing the billable hour requirement, and Attorney At Law warned that encouraging/providing vacations means nothing absent a reduction in billable hours.

One alternative to hourly billing is a flat fee.

Again, today’s focus is on how to handle flat fees.  Still, for anyone considering the model, Clio has 5 Ways Flat Fee Attorneys More and How To Determine The Price Of Flat Fee Legal Services.  Meanwhile, Attorney at Work has Flat Fee or Hourly? Pros and Cons of Lawyer Billing Options.

So, you’ve decided to use flat fees.  Consider:

  • Mike Kennedy retains you. You agree to handle Mike’s matter for $ X. Prior to you doing any work, Mike advances $ X.

Now what?

At the beginning of this post, I promised eventually to address Vermont’s rule. Well, since then I got distracted and am only now back to fulfill my promise.  Alas, in the interests of time and needing to run to the store to get some half & half for this morning’s coffee[1], I’ll resort to an old blogger’s trick:  here’s my post on how to handle flat fees that are paid in advance of services being provided.

As always, be careful out there.

Dollar Sign

[1] Jennifer & Laura: the carton says “October 27.”  You know how I am.