Fighting Over Fixed Fees

You have probably seen the Avvo commercials by now: the quick little scenes linked to humorous search terms typed onto the middle of the screen. The little public intoxication dog is adorable and has helped grab a lot of attention for the fairly new company.

Avvo is an online legal services marketplace. Avvo’s main purpose is to connect lawyers with people in need of legal help via their site, over the phones, or through a mobile app. This sounds simple enough, but some controversy has started cropping up from their recent announcement that they are testing fixed-fee (aka flat-fee), limited-scope services through participating attorneys in several large US cities, with plans to roll out to additional markets soon.

Fee Types

Attorney fees are labor charges and costs that lawyers or their firms charge for legal services provided to their clients. For reference, there are a number of different types of fees that attorneys use:

• Hourly Rate – this is the traditional billable hour, and the method most commonly used.
• Consultation Fee – a charge for the initial meeting between an attorney and their client; some firms offer an initial consultation for free while others do not.
• Contingency Fee – based on a percentage of the amount awarded in the case, if the case is won.
• Referral Fee – if a client is referred to another lawyer, the referring lawyer might ask for a portion of the total fee that is paid for the case.
• Retainer Fee – similar to a down payment, generally the client pays a set amount up front and as costs are incurred, payment is taken from the retainer. Anything left once the matter is closed may or may not be refundable, depending on the lawyer’s or state’s policy.
• Statutory Fee – a fee set by a statute or court.
• Flat (Fixed) Fee – a pre-arranged, total fee; e.g. $5,000 is charged whether 5 hours or 5 days’ worth of work is done for a particular legal service.

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