Summary
I want to end the substantive part of this book with something that is not a rule or a form: how legal work gets priced, and why I do it the way I do.
Key points
- A meter discourages exactly the calls that prevent expensive problems.
- With a flat fee, the number in the engagement letter is the number.
- Scope is written down. Material changes are scoped and priced separately, in writing, before work begins.
- Clients reach the lawyer who reads their filings, directly.
I want to end the substantive part of this book with something that is not a rule or a form: how legal work gets priced, and why I do it the way I do.
I bill flat fees. For a defined scope of work, the fee is agreed in writing before the work begins, and it does not change because the work took longer than I expected. For ongoing securities and corporate work, I offer a monthly flat fee covering the services within an agreed scope, with no separate charge for calls and questions within that scope.
The Meter
The reason is not marketing. It is about what a meter does to a relationship.
When every phone call has a price, a client who is uncertain whether something is a reportable event has a financial reason not to call. And the calls that do not happen are, in my experience, the expensive ones. The 8-K that was filed late. The press release that went out before anyone read it. The investor introduced by a finder, when nobody asked how the finder was being paid.
Every one of those is a situation in which a five-minute conversation would have cost nothing to have and a great deal to skip. This entire book has been about those conversations. A flat fee removes the meter. Call. Ask the question that seems too small to ask. That is the point of the arrangement.
Honesty About Cost
There is a second reason, which is simple honesty about cost. A registration statement is a definable piece of work. I have drafted a great many of them, and I know approximately what one requires. A company deciding whether to go public is making a capital allocation decision, and it cannot make that decision well against an estimate that might double. With a flat fee, the number in the engagement letter is the number. For large projects, such as registration statements and private placement memoranda, the flat fee can be paid in negotiated installments.
What a Flat Fee Is Not
A flat fee does not mean cheap, and it does not mean unlimited scope. The scope is written down. If the matter changes materially, whether through a new transaction, an investigation, or something nobody anticipated, the new work is scoped and priced separately, in writing, before it starts.
Direct Involvement
The last point is not about fees but about who does the work. I am directly involved in every matter, from the first conversation through completion. Clients reach me directly. I do not believe securities counsel can give good advice at a distance from the documents, and I do not believe a client should have to wonder who is actually reading its filings.
Frequently asked questions
Why can hourly billing make securities problems more expensive?
A meter discourages exactly the calls that prevent expensive problems.
What does a flat fee mean for the client?
With a flat fee, the number in the engagement letter is the number.
How are scope changes handled under a flat fee?
Scope is written down. Material changes are scoped and priced separately, in writing, before work begins.
Who does the client actually talk to?
Clients reach the lawyer who reads their filings, directly.
This is general information, not legal advice.
Continue with the book
From the appendices
Download the working tools
Three printable checklists drawn directly from Fred’s manuscript, with definitions from the book’s glossary.