FLAT-RATE ATTORNEY RETAINERS, P.2

"I can't think of too many months where we haven't referred some sort of an issue to our attorney, although I'm sure it happens," Schreiber says. "We look upon it as an insurance policy. Even if there was a month when we didn't have to use our attorney's services, our feeling was that it would more than be offset by months when we're constantly going back and forth on different issues.

In fact, he believes, "[T]here's a very, very good chance that our legal fees could have been double what they are now if we hadn't had the [flat-rate] retainer." As well, "[H]aving an attorney on retainer means that we have somebody who is really familiar with our issues."

There are other advantages. For one thing, it encourages clients to seek out assistance from their lawyer early on before litigation begins (and possibly forestalling it through early intervention by counsel). Geoffrey Mazel, a partner at Hankin & Mazel, who encourages the use of flat-rate retainers, says that unnder an hourly rate system, "They don't want to talk to me because I'm too expensive." But, "If you're paying $22 for brunch and it's all you can eat, you don't mind going up for seconds." The flat rate, he notes, "doesn't include litigation or complex vendor contracts. It includes all the day-to-day stuff: the phone calls, e-mails, my day-to-day advice."

Agrees Alan Kramer, board president of the 60-unit co-op in Manhattan at 17 West 67th Street: "The key advantage to me is that I feel very comfortable to be able to pick up the phone and ask any question and get our lawyer's advice on issues. I don't feel the meter's running."

Is it the wave of the future? There is much talk about flat-rate fees in the legal community, and more co-ops and condos may be inspired to switch because of the freedom it gives them to use their attorneys as partners rather than as living embodiments of the phrase "time is money." Certainly Wagner, burned by the loss of his long-time client, has taken note. Says he: "I'm seriously considering setting up a flat-rate retainer myself."

Adapted from Habitat April 2009. For the complete article and more, join our Archive >>