Professional fees Law Firm - Larisa Somfalean Attorney at Law Bucharest.

In a Law Firm, an advocate may, at the outset of the brief and at reasonable times prior to the termination of the same, require the client to make a payment or payments on account of fees, costs and disbursements to be incurred.

An advocate's fee shall be reasonable and may be established either by the advocate himself or by agreement between the advocate and the client. The factors to be considered in determining the reasonableness of a fee (whether agreed or otherwise) include the following:

• The time required, the novelty and difficulty of the issues involved, and the dedication requisite to perform the legal service properly;

• The responsibility undertaken, with particular reference to the amount involved;

• The time limitations imposed by the client or the circumstances;

• The nature and length of the professional relationship with the client;

• The experience, reputation and ability of the advocate performing the services;

• In litigation matters, the fees recoverable from the other party;

• The likelihood that the acceptance of the particular brief will preclude the acceptance of other briefs by the advocate.

An advocate should normally render a bill of costs to a client within a reasonable time of concluding the matter to which the bill relates. An advocate's bill of costs should contain sufficient information to identify the matter to which it relates and when the services were rendered.

There are several alternative billing schemes that seem to fulfill the goal of tying the law firm's compensation to the value of the case to the client, thereby giving the firm the incentive to do a cost-effective job:

Contingent fees. A contingent fee encourages counsel to staff a case efficiently, file cost-effective motions, take cost-effective discovery and settle a case as soon as possible. As added bonuses, the client does not need to comb through massive hourly fee bills to manage the case (reducing the client's case-related expenses), the fee is proportional to the value of the result and the firm need not bother with keeping track of time, in most instances.

The tendency of many advocate firms to avoid contingent fees like the plague -- by citing the uncertainties of litigation - makes many clients laugh. Clients normally bear not only those uncertainties, which expert counsel advocate should be in the best position to minimize, but also the uncertainty caused by the clients' limited control over their cases and hourly fees.

Hybrids of hourly and contingent fees. One variety of value billing combines an hourly component, at discounted hourly rates, with a contingent "kicker," giving the advocate a stake in the outcome of the case (and in getting to that outcome sooner and more cheaply). My experience with this suggests that the discount to hourly rates must be significant; otherwise, the firm's profits are not at stake and they do not have the proper incentive to handle the case cost-effectively.

Bonuses. A variation on the hybrid theme is the bonus or premium fee situation, in which firms earn a pre-determined reward for accomplishing a particular result, meeting a deadline or whatever. The underlying fee is usually an hourly fee, perhaps discounted (which brings it into the realm of value-billing).

Bonuses can be used where there is concern that hourly rates would fail to fully compensate a firm of advocate or would encourage inefficient conduct; e.g., where the matter will preclude the firm from obtaining other business due to unusual conflicts, where a firm becomes involved in a short-term emergency or where the client wants to borrow a firm's top gun but not pay for the rest of his or her entourage. Bonuses can be tied to non-economic milestones, making them more flexible than contingent fees, if non-economic forces are important to the client.

Lump sums, fixed fees. Other value-billing alternatives include a negotiated lump sum or fixed fee for the project or case. The client agrees to pay for the case to be handled, with the advocate receiving the full amount -but only that amount -- regardless of when the law case terminates.

If the fee includes expenses, it also encourages the advocate to economize and to manage the fees of experts, for example. If the case ends early or is handled efficiently, the advocate receives a "bonus" above hourly billing, which provides the firm with an incentive to provide cost-effective quality.

However, if the Law Firm case goes longer than expected and is handled inefficiently or takes an unexpected turn, then the advocate still has a professional duty to fulfill for the client, even if it means the advocate loses money.