Solo attorney chooses flat fees over billable hours

With the opening of her law practice in Towson, Nicole Whitaker said she aims to take the mystery out of her clients’ legal expenses by using flat fees rather than the legal standby, the billable hour.

Describing the philosophy behind her practice, Whitaker recalled watching her parents receive a bill for several hundred dollars — seemingly out of the blue — after attending a legal consultation.

“I’ll never forget how they felt when they got that bill. They were shocked and felt deceived,” she said. “I think that experience really influenced the way I wanted to run my practice.”

Alternative fee arrangements — including flat fees — are already popular among in-house legal departments. A 2013 ALM survey found that 19 percent of corporate legal departments used alternative billing arrangements for more than half of their legal work the previous year, up from 12 percent.

Now, Whitaker hopes they will prove just as popular with individuals who want to rein in their legal spending.

Whitaker began planning to launch her practice, which opened Jan. 1 and focuses on criminal defense and immigration law, a few months before graduating from the University of Baltimore School of Law last year.

While still in law school, she began teaching English as a second language at the Community College of Baltimore County, and her students there occasionally approached her with legal questions.

Although as a law student she was unable to give legal advice, Whitaker — who taught English in Spain before attending law school — said the experience encouraged her to make immigration law a cornerstone of her practice.

“I always wanted to have my own practice but never thought I could do it right out of law school,” she said. “I realized, this is kind of a client base that I have right now. I decided that rather than start working for somebody else, now would be the time to do it.”

Her practice, Whitaker Legal LLC, will also cover trusts and estates, family law, civil litigation, traffic law and DUI. So far, Whitaker said, she has about five clients and plans to find more by cultivating a blog audience, taking pro bono cases and doing some direct mail marketing.

Although potential clients might not search specifically for an attorney who employs a flat fee payment plan, Whitaker said she believes the billing arrangement will be a big factor in swaying clients to choose her firm.

“A lot of clients are hesitant to hire a lawyer because they know it might end up costing them way more than they think it will,” she said. “Being able to quote a client up front exactly how much it will cost, and creating a clear retainer agreement at the beginning of the case, helps clients understand exactly what they’re getting themselves into.”

Carolyn Elefant, an energy lawyer who runs the MyShingle blog, said the flat fee payment model becomes particularly advantageous for more experienced lawyers, who can resolve a matter in fewer hours but continue to charge the same fee, as long as it’s reasonable to the client.

“I do think it’s a great idea,” Elefant said. “First of all, it creates certainties — the client knows what he or she is paying up front and can budget for it. And, administratively, it’s so much easier to not bill by the hour.”

From a cost perspective, Elefant said, it’s significantly less time-consuming for the attorney than keeping track of billable hours.

As for Whitaker, flat fees at her firm will start at $500 for traffic and criminal cases, she said. She will charge $500 for a simple will and $1,000 for an estate-planning package that includes a simple will, advanced medical directive and power of attorney.

Thomas C. Costello, an attorney since 1994 and founder of the Costello Law Group in Towson, said his firm charges a flat rate of $1,000 or less for an estate-planning package. And for just a simple will, he said, $500 is “not unreasonable.”

“Let’s put it this way, there’s a lot of people paying a lot more,” he said.

Beyond certainty, Whittaker sees another, less tangible benefit to flat-fee arrangements.

“There’s a perception in the community that lawyers are greedy, and I think that a lot of people mistrust lawyers,” Whitaker said. “Having flat fees creates a sense of loyalty and trust between an attorney and client. There are very few things you agree to pay for in life without knowing what it’s going to cost.”