A to Z Tips from TSR: “F” is for Flat Fees and Options Related To Them
FLAT FEE BILLING IS GAINING POPULARITY IN LAW FIRMS
ABSOLUTE, MINIMUM, MAXIMUM FLAT FEE ARRANGEMENTS
Timeslips offers flat fee billing in 3 basic varieties:
|Absolute Flat Fee||Charge covers all fees (or fees plus expenses).
Slips that are associated with an absolute flat fee
derive their value once the fee is completed.
|Minimum Flat Fee||The client is charged a minimum fee.
Once the slip values equal that amount,
additional slips entered will be billed in additional to the flat fee.
|Maximum Flat Fee||Charges are based on rate x hours
until the designated maximum fee amount is reached
Here are some things that many firms are not aware of:
- Duration is used to determine when the slips are assigned a final value
- The default duration is “PERPETUAL” which means that every time the flat fee amount will be charged every time the client is billed
- The duration “JOB” does not calculate collections or billed amounts until the status is updated to “FINAL BILL” or “COMPLETED” and a final bill is approved
- The value of the slips is calculated based on the contribution of each slip as it compares to the total amount billed. Therefore, it is important to assign a rate value to each slip
Once a flat fee is completed, the Flat Fee Analysis report will break out the value of the time compared to the total amount billed. This report is extremely helpful in calculating future flat fee agreements.