Billing Practices and Lawyer Compensation

The new OSB 2017 Economic Survey is available for download. In it, you’ll find a plethora of information about Oregon lawyers, including employment characteristics, compensation, billing practices, career satisfaction, and future plans.  Here are a few highlights:

Employment Characteristics

  • 28.3% of survey respondents reported being a member of at least one other state bar.
  • 86.1% reported working as an Oregon lawyer; 13.9% were not.
  • Lawyers who chose to work part-time did so to maintain work/family balance, pursue other career interests, or because they were semi-retired.
  • Slightly more than 60% of working Oregon lawyers reported being in private practice, with just under 20% in government positions.
  • The most dominant areas of private practice are business/corporate (transactional and litigation), civil litigation (plaintiff and defense), tax/estate planning, family law, and real estate/land use/environmental.
  • The most common practice size was a 1 lawyer office, followed by 3-6 lawyer offices, and 7-20 lawyer offices.

Compensation

  • The statewide mean compensation was $143,277.
  • The amount of compensation was highest in the Portland metro area and lowest on the Oregon coast.
  • The highest paying area of practice was real estate/land use/environmental.
  • Statewide, female lawyers reported earning less than male lawyers.
  • Peak earning years were 50-59, with compensation generally decreasing after age 60.

Billing Practices

  • Statewide, the mean hourly rate was $286, ranging from $226 to $324 regionally. (The highest reported hourly rate was $850 in Portland.)
  • By area of practice, the highest hourly rate was for business/corporate – litigation, with a mean of $333.  Other top billing areas were: real estate/land use/environmental, civil litigation – defendant (excluding insurance defense), and business/corporate – transactional.

Career Satisfaction

  • On a scale of 1-5, with 1 being very dissatisfied and 5 being very satisfied, lawyers statewide had a mean career satisfaction rate of 3.98. In general, the more years in practice, the greater a lawyer’s satisfaction with his/her career.
  • By location, employment, and area of practice, the most satisfied lawyers were:
    • In the Upper Willamette Valley
    • Working as judges or hearing officers
    • Practicing in civil litigation defense, real estate/land use/environmental, or criminal law (private bar).

Future Plans

  • 19.2% of lawyers statewide reported they were planning or contemplating retirement.
  • 6.7% were planning to leave the profession, but not retire.
  • Another 10.3% were planning to reduce their practices.

All Rights Reserved 2018 Beverly Michaelis

 

Should You Be Charging Flat Fees?

A recent Business Journal post suggests that the number of clients requesting flat fee arrangements in Oregon has doubled in the past year. 

Why would clients prefer a flat fee?

  • Certainty – the client knows up front exactly what your services will cost.
  • Budgeting – if the client knows what it’s going to cost, he or she can plan appropriately.
  • Negotiating room – flat fees may offer a client more bargaining room if the lawyer is willing to commit to volume legal services.

Flat fee arrangements may or may not include costs. This should be clearly spelled out in your fee agreement.  Hybrid contracts – a mixture of flat fee and hourly billing – are also becoming more common.   If the hourly rate is triggered by a particular event, or when you reach a certain stage in the case, describe the event or stage in a way that leaves no doubt in the client’s mind. Remember, if a fee agreement is ambiguous, it must be construed against the lawyer.

Flat fees earned upon receipt (payable up front) are subject to strict regulation by the bar.  Read and understand OSB Formal Ethics Opinion 151.  Never call these fee arrangements “nonrefundable.”  Fees are always subject to refund if the work is not done.

For more information on this subject, see The Ethical Oregon LawyerFor a collection of fee agreements that comply with the ethical rules, consider purchasing the Fee Agreement Compendium. Both are included in the Oregon State Bar BarBooks subscription. Additional fee agreements are available on the PLF Web site.  Select Practice Aids and Forms, then Engagement Letters. 

When charging flat fees, be sure to track your time.  If you disengage from the case early or the client terminates your services, it will be easy to calculate the refund due the client.  Tracking your time will also allow you to monitor whether your flat fee needs adjustment based on the amount of time spent on a particular type of matter.

Copyright 2009 Beverly Michaelis