Increasing Access to Justice with Alternative Fee Structures

Individuals who find themselves unable to afford legal services may find assistance in the form of pro bono legal services or online self-help resources. While these are important ways that the legal community is improving access to justice, they are by no means a comprehensive solution. Online self-help resources may have limited effectiveness for those who lack literacy skills or access to technology (see previous Access Review post here), while pro bono legal services are usually only available in major urban centres, and to those who meet low-income thresholds that exclude the middle class.

This persistent gap in access to legal services raises the question of what lawyers can do to help improve access to justice. The current “billable hour model” has made legal representation unaffordable for low- and middle-income earners. John-Paul Boyd suggests that offering alternative fee structures can effectively increase access to justice while also maintaining the profitability of your law practice. One type of alternative fee structure that many lawyers are familiar with is the contingency fee arrangement, in which a lawyer’s payment is tied to success of the case. Other less common alternatives that are gaining attention in the legal profession are the “unbundling” of services, flat-rate fee structure and sliding scale fees.

“Unbundled” legal services, also known as limited scope services (often provided in accordance with carefully crafted limited-scope retainers), refer to the provision of limited legal services or representation for discrete parts of a legal matter without the expectation of full representation.[1] The lawyer may still charge her regular hourly rate, but because the client can choose ahead of time which specific tasks she wants to retain the lawyer to perform, the client has a better idea of what the final bill will be. Because it is much easier to estimate the cost of discrete tasks in advance (for example, a client could retain counsel to do three hours of legal research and provide a brief summary of the results of that research), the client has more control over the cost of legal services she purchases than if she had hired a lawyer on a full retainer. Some clients may want a lawyer to provide courtroom representation only (choosing to do all preliminary work themselves); others may want to pay for a legal opinion and research, but represent themselves.

Another alternative is the adoption of a flat-rate billing model, under which a lawyer sets fixed rates for the provision of identified legal services regardless of how much time that service ends up taking. This model allows clients to choose which services they want, and to know the entire cost ahead of time. Criminal defence lawyers regularly operate with flat-rate billing, but it seems much less common in other areas of law.

Lawyers can also adopt a sliding scale fee structure, in which clients are charged variably for legal fees based on ability to pay. Under this model, a lawyer indexes her hourly rate according to factors such as household size and income so that clients earning lower household incomes are charged a lower hourly rate for legal services. Many lawyers who use this fee structure also set income eligibility requirements to increase access to those who cannot afford full-price legal fees, but earn too much income to qualify for pro bono services. Here is an example of a sliding scale fee chart based on family size and family income:[2]

If you are a lawyer adopting an alternative fee structure, experts stress the importance of establishing clear expectations with your client, and carefully considering which services you will offer under that structure. Before adopting an alternative fee structure, lawyers should understand and be prepared to manage the potential risks involved. For excellent advice about how to successfully implement “unbundled” services and flat-rate fee structures, read these articles:

“DIY A2J 4: Unbundle Your Services, Reinvent Your Billing Model”

Alternative fee structures like unbundled services, flat-rate fees and sliding scale fees can make legal services affordable for clients by allowing them increased control over what services their lawyer provides, and advance knowledge of the cost of that lawyer’s work. They are, therefore, one way that lawyers can increase access to professional assistance—and justice—for those who can’t afford to retain counsel under a traditional billing model.

[1] Nancy Carruthers, “Ethically Speaking: The Ethics of Limited Scope Retainers” (2012) 10: 1 The Advisory 11.

[2] Source: Open Legal Services (http://openlegalservices.org/do-i-qualify/?)

 

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About Rebecca Lee

Rebecca is a second year law student at the University of Alberta. She is passionate about access to justice and embracing diversity in the legal profession. In addition to volunteering with the ECLC, she is the co-president of Law Students for Inclusion & Diversity, a student group on campus. In her spare time, she enjoys writing and flamenco.
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