Itkowitz PLLC Legal Project Management

Philadelphia Skyline

Estimates and Alternative Fees

Litigation is expensive, time consuming, and stressful.  Therefore, you should not enter into it lightly.  To mitigate the downsides of litigation, Itkowitz PLLC has developed a unique way of working with clients, which grew directly out of our Legal Project Management exploration.
At the beginning, and at all key stages of the engagement, the firm prepares detailed Legal Project Management Letters (“LPM Letter”) for the client.  Itkowitz PLLC usually charges a reduced rate for the preparation of the LPM letters.  LPM Letters are extremely comprehensive case analysis memos directed to the lawyer-client team, which address for the case at that point: the facts, the law, the status, the client goals, current options -- and for each option – the pros, cons, time., cost, risks, and likelihood of the option advancing the goals, what’s out-of-scope, legal fees, a communications plan, legal fees, and a recommendation.
After the client is presented with a LPM Letter, the client and the firm review the client’s goals and expectations, and the client decides which option to pursue.  Thereafter, the client and the firm will review the estimate for the option and agree to the "Scope of Work".  The “Scope of Work” is defined as a set of tasks and/or a period of time upon which the client and the firm agree.
Next, the firm proposes and the client agree to a discounted and capped fee for the Scope of Work.  Finally, the client pays the discounted capped fee in full and in advance of the work commencing.  In other words, the cap and the discount are the quid pro quo for the advanced payment.
The firm keeps track of the hours spent working on the matter using a regular hourly billing method, which we say more about in our standard retainer agreement.  If the Scope of Work concludes and the compensation arrived at using the regular hourly billing method is less than the capped fee, then such unearned portion of the fee will be returned to the client.
The purpose of this method of working and compensation is to:
(1) Keep the Client and the Firm engaged in a productive working relationship
(2) Clearly and unequivocally define exactly what will (and will not) be done
(3) Make the legal fees predictable for the Client, and
(4) Avoid undue delay in payment for the Firm
Clients love this.  And it works well for the Firm.
When I first started developing and refining this system, I would run it by other lawyers.  I heard two objections over and over.  One - you will never get clients to pay you ahead of time; and two - even if you do, you will have great difficulty making a profit when limited by a discount and a cap.  In reality -- these objections have proven very wrong.
From the point of view of our typical client, there is great value in knowing exactly what a stage of litigation will cost ahead of time, and knowing that such fees will not be increased.  Many clients’ biggest complaints (about any firm) are the way legal fees spiral out of control.  This approach prevents that.  The advantage to the firm, which is a small business, is improved cash flow and an assurance that we will never have to chase the client around for money.
Suffice it to say, that our rigorous Legal Project Management approach has led to our clients paying less, being happier, and the firm actually making more money. 


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