STATEMENT OF FEES
As of May 15, 2005, I will charge clients for residential real estate matters as follows:
Part 1: For Purchasers of Real Estate
I charge for my actual time spent, at a rate of $200 per hour. (See Part 3 below regarding how I bill for actual time spent.)
Part 2: For Sellers of Real Estate
I bill for my actual time spent, at a rate of $200 per hour. (See Part 3 below regarding how I bill for actual time spent.) However, I treat any commission I receive as attorney agent for a title insurance company (see yesterday's post) as a credit against my fees. To take an example:
- I work for 10 hours representing a seller, so my fee is $2,000.
- I receive a commission of $850 from the title company for acting as attorney agent in the purchase of title insurance on behalf of the seller.
- Therefore, I am owed $1,150 (or $2,000 less $850) by the seller for attorney's fees at closing.
Part 3: Actual Time Spent - Billing Rules
I realize that billing for actual time spent can cause some concern for clients. I try my best to address this concern by adhering to the following billing rules:
1. The smallest increment of time for which I charge is .25 of an hour, and I don't charge for a portion of .25 of an hour. Instead of computing my time on a daily basis, I add up all of the minutes worked on your matter, and at the end of the representation, I charge based on those total minutes (again, without charging for a portion of .25 of an hour). Another example:
I work 500 minutes on your matter, which amounts to 8 hours and 20 minutes. You will be charged for 8.25 hours of my time (not 8.50 hours), so my fee will be $1,650.
2. Upon request, I am happy to provide estimates of my fees at each stage of the transaction, and to then follow up with the client by reviewing my actual time spent at each stage. For instance, I might give a quote of 2.50 hours for my initial review of the contract and the negotiation of attorney modification and inspection issues. Once this stage of the process is complete, I will follow up with the client and let him or her know (a) how much time I actually spent on this stage, and (b) if my actual time spent was more than or less than 2.50 hours, why this was the case.
3. In order to promote certainty, all closings will be deemed to take up 2.0 hours of my time. This enables me to let my clients know the final amount of my fees prior to closing. For what it's worth, I estimate that a "typical" closing actually takes about 2-1/2 hours, which doesn't include travel time.
Part 4: Retainers and Time of Payment
I don't require the payment of a retainer in order to represent the purchaser or seller of real estate. I expect payment of my attorney's fees at the closing, with two exceptions: (a) if I perform work on a deal that subsequently is terminated (because the contract becomes null and void or because one of the parties defaults), I expect payment upon such termination; and (b) when I represent a purchaser or seller of new construction, where the time period between the negotiation of the contract and the closing may be a year or more, I expect payment for work performed in the negotiation of the contract when such negotiation is completed.
Part 5: Billing Rationale
1. I believe that my experience and legal abilities in the area of residential real estate provide my clients with real value.
2. My time is an important asset of my practice. I am happy to spend as much time as is needed to compete a client's real estate transaction so long as I am compensated for doing so.
3. I realize that other Chicago-area attorneys may charge lower fees for residential real estate transactions than I do. I believe that I offer a different level of service from many of these attorneys, and I believe that this level of service is appropriate for a major life transaction like the purchase or sale of real estate. For instance, I will...
-review all aspects of the transaction with my client, in as much detail as the client wants, with a particular focus on costs, important dates and documents;
-handle the transaction by myself, so that my clients know their legal work is being performed by me (and not by some legal assistant or secretary); and
-make myself available for client questions and concerns. When a client calls my office, I answer the phone (or if I'm not in the office, I return the call a.s.a.p.); when a client e-mails me, I respond as quickly as I can.
4. As yesterday's post indicated, I feel somewhat ambivalent about receiving a commission for acting as attorney agent for a title insurance company. I believe that Part 2 discussed above addresses the attorney agent issue in a way that is fair to me and to my clients:
a. Part 2 removes the potential conflict of interest in obtaining title insurance on behalf of a client. To use the above example of 10 hours spent representing a seller: the seller will pay a total of $2,000 for title insurance and attorney's fees regardless of whether the title insurance cost was $1,000 or $800.
b. Part 2 also puts the focus on work I have actually performed, which seems appropriate to me. It has always struck me as strange that a lawyer could be paid $500 for 10+ hours of attorney work and then receive $800 or more for 10 minutes spent filling out and faxing in an order for title insurance.