Two attorneys quoted the same case differently. How to compare what they sent you
One quote is a flat fee, one is an hourly estimate, and the totals are not comparable until you have normalized four things.
- Written by
- Ellen Marsh
- Published
- Filed under
- Legal
- Length
- 830 words, about 4 minutes
Two firms, one dispute, two very different pieces of paper. The first quotes a flat fee through a defined stage. The second quotes an hourly rate with an estimated range. The flat fee is the larger number and it may well be the cheaper option.
Four adjustments make them comparable.
Adjustment one: normalize the scope
The most common reason two quotes differ by a large multiple is that they cover different work.
Write out the stages of the matter yourself, in plain language, then mark which stages each quote includes. For a typical civil dispute the stages run roughly: assessment and advice, pre-suit correspondence, filing, discovery, motions, mediation or settlement conference, trial preparation, trial, and enforcement or appeal.
Discovery is where the divergence usually lives. It is the longest and least predictable phase, and a quote that stops before it is quoting a fraction of the matter. Ask each firm which stages their number covers and get the answer in writing.
Adjustment two: normalize who does the work
An hourly quote has a rate. A matter has several people.
Ask for the full rate table: partner, associate, paralegal, and any support time billed. Then ask the more useful question, which is what proportion of the hours each firm expects to be worked at each level.
A high partner rate with most work delegated to an associate and a paralegal can produce a lower total than a mid-range single rate where the partner does everything. The blend matters more than the headline rate, and firms answer this question readily because it is how they staff.
Adjustment three: pull out the costs
Costs are not fees, and they are frequently excluded from both quotes without being mentioned in either.
The categories to price separately:
- Court filing fees and service of process.
- Deposition costs, including the reporter and the transcript.
- Expert witnesses, which in a technical dispute can exceed the legal fees.
- Records retrieval and subpoena costs.
- Mediator fees, usually shared between the parties.
- Travel, courier and copying, where charged.
Ask each firm for its estimate of costs on a matter of this type. The estimates will differ, and the difference tells you something about how each expects to run the case.
Adjustment four: find the assumptions
Every estimate rests on assumptions the letter does not state. Ask directly:
- What does this estimate assume about how the other side behaves?
- What is the most likely event that would take this outside the range?
- How many matters like this have you handled in the last two years, and what happened in them?
- What is the estimate to the next milestone, rather than to final resolution?
The last question is the important one. Estimates to conclusion are close to guesses in contested matters. Estimates to the next milestone are things a firm can actually predict, and comparing two of those is comparing something real.
How the fee structures differ in risk
| Who carries the overrun risk | Where it works well | What to check | |
|---|---|---|---|
| Hourly | The client | Unpredictable matters | Rate blend, billing increment, cost approvals |
| Flat fee | The firm | Defined, repeatable work | What triggers a return to hourly |
| Contingency | The firm | Money claims with a solvent defendant | Whether the percentage is calculated before or after costs |
| Capped hourly | Shared | Matters with a known worst case | Whether the cap is per stage or overall |
A flat fee carries a premium because the firm is absorbing risk. That premium is the price of certainty, and whether it is worth paying depends entirely on how much variance you can tolerate rather than on which number is larger.
The questions that reveal more than the quote
- What would you advise if the answer were not going to earn you a fee? The best answers to this are frequently that the matter should settle, or that a letter would probably do it.
- What is the realistic range of outcomes, with rough probabilities? Anyone unwilling to give a range is either unfamiliar with this kind of matter or unwilling to disappoint you.
- What is the worst plausible result and what does it cost me?
- Who will I actually speak to, and how quickly do calls get returned? Mundane and it determines the experience.
The number you set yourself
Before either quote arrives, decide what the matter is worth pursuing. Take the amount genuinely at stake, subtract what you would accept in settlement today, and be honest about the value of your own time and attention over the months this will run.
That figure is the ceiling. A quote below it is a candidate. A quote above it means the matter should be settled, narrowed, or dropped, regardless of how strong the position is.
Clients who set that number first tend to instruct quickly and well, because they are choosing between two options against a standard rather than trying to work out what legal work should cost in the abstract. Both quotes then become answerable questions instead of a pair of intimidating totals.