Welcome to a Rosen Institute Masterclass on fixed or flat fees in the law firm. I’m Lee Rosen. Today, we’ll talk about some of the reasons you might consider moving from an hourly environment to a fixed fee situation, some of the advantages of that, some of the disadvantages of that, some of the regulatory and other challenges of making that switch.

We’ll talk through how to set fixed fees and how to deal with them operationally. It’s a little bit different when you’re dealing with fixed fees than when you’re dealing with hourly fees. We’ll talk some about the marketing of fixed fees and how they might be an advantage. We’ll talk about getting your team onboard and helping them to transition from hourly billing to fixed fees. We’ll also cover some of the technical issues, like accounting, some of the ethical issues and some of the issues that come up when you’re trying to help clients understand why fixed fees might be advantageous for them.

We’ll wrap-up with some tips, some things that I’ve learned having done this now for a couple of decades and we’ll work through some of the very practical issues of dealing with fixed fees in the law firm environment. Before we get going, let me give you a feel for what led me to make the switch from hourly billing to fixed fees.

It was more than two decades ago and I was having a bad week. Well, the fact of the matter is it was probably a pretty typical week and I feel like I had a lot of bad weeks back then. We were using hourly billing at the time and just doing our thing and there was really no reason to switch. What happened that really got me thinking is this; I was in my office, a computer repair guy was in my office with me, literally is sitting there at my desk. I was on one side waiting on him, he was behind the desk and he was there to repair something that had gone wrong with my machine. I think it was having trouble connecting to the network. This was a long time ago.

He was unraveling things, pulling the computer apart, so that he could get inside of the box that was sitting up on the desk. As he was working and this is an outsourced guy who was billing by the hour. As he was working, he noticed a picture of me with my family at Disney World. It was one of those photos of the family in front of the castle and he starts asking me questions about going to Disney World.

Now this guy is billing me at a $125 an hour to fix the computer and it didn’t really occur to me at the outset of the conversation as he started asking these Disney questions that I was paying to answer these questions and I started into my long explanation about Disney World. I considered at that time, I considered myself an expert on navigating the Magic Kingdom and avoiding the lines. I had been with our children quite a few times and had read all the books and was really into how one could have a positive experience at Disney World without the children crying the whole time.

I started talking to him about all of this and it popped into my mind that I was paying to answer his questions and that really stressed me out. I just wanted him to fix that machine and get out of there, so I could stop paying for the billing. That got my head spinning about hourly fees, versus fixed fees and how dissatisfied I was as a consumer when the vendor was selling to me on an hourly basis. In the same week, just a few days later, something went on with the outside spigot of our home where the hose plugged into the water. It had broken and water was coming out.

I had a guy, I called some random plumber to come to our house and he showed up, examined the problem we were having. He was a guy from the Roto-Rooter company that I had seen an ad for in the phone book. He walks in after examining the situation and gives me a fixed fee for the repair. I instantly breathed a sigh of relief, knowing what this thing was going to cost and realize the stark contrast between my experience with the computer guy hourly and the plumber charging a fixed fee. I knew from having dealt with plumbers before that that was unusual; a lot of them also billed by the hour at that time.

Those two contrasting experiences during my bad week really got me thinking about the way we were billing in the law firm on an hourly basis and how I felt so much better as a customer, as a client when people were billing me a fixed fee. I just felt strongly that there must be a way, there must be an option for us to help people feel more comfortable, like I felt more comfortable with the Roto-Rooter plumber who was billing me in a fixed way, rather than in an hourly way.

Now I will stop here for a moment and just address some of the downsides of hourly billing. If you’re listening to this program, the odds are good that you’re hourly billing now, that that’s how you charge your clients, and that you’re thinking about making a switch. I just want to run through a quick list of some of the things that I think aren’t really good about hourly billing. These are reasons I think to make the switch. Number one, hourly billing puts the lawyer and the client at odds. You feel that tension, that friction all the time when the client knows that the clock is running, that every minute of talking to you, of interacting with you, of having you do work is costing them money.

It really is challenging, because the lawyer and the client need to be bonded. We need to be on the same side of the argument working to achieve the client’s objectives. When there is this division between us over money, it creates a stress, it creates a tension that is not helpful, or healthy for the relationship. I think that’s important.

Second thing, hourly billing rewards inefficiency. We make more money if we are inefficient. That keeps us at odds with our client. Now, I know that you don’t go out of your way to be less efficient. That’s not your plan. You want to be as efficient as possible and even with hourly billing, you want to bring the benefit of that efficiency to your client, even if it means billing less. You figure, “Well, I’ll bill less to each client, but I can still be productive and have more clients in the same amount of time.”

The problem is that in a law firm, the economics drive the business in a variety of ways that are not always immediately obvious. There are unintended consequences. While you may be able to regulate yourself toward efficiency, you can assume that at some level, your business model will be impacted by the reality that your billing model rewards inefficiency. It’s hard to regulate your entire team as you grow. Management is challenging. Monitoring people is difficult. When the business model rewards inefficiency, you can assume and generally you will be correct in that assumption that this business will grow inefficiently. That’s a downside.

Third thing, there is a penalty in the hourly billing environment for adopting technology. The technology makes you more efficient. The billing model rewards inefficiency. The technology benefits the client, but you are disincentivized to adopt the technology. We see that in the legal arena generally, this laggard mentality toward technology that is driven at least in part by the hourly billing model. That’s a downside.

Number four, every hourly billing law firm has to create an accounting bureaucracy. You see it even in the smallest of law firms, a solo all by themselves, one of the first things they need is help with time and billing with tracking that and with the accounting. As the law firm grows, you end up with several accounting people, you end up buying more sophisticated software billing systems, you end up having all sorts of costs around preparing and sending bills, it adds a layer of bureaucracy to the law firm. I think in a lot of law firms when you break it out, you find that 20% plus of the cost in the law firm is related to this accounting bureaucracy.

The fifth downside, nobody likes tracking time. It’s a nightmare. We all know that the reality of that nightmare is that we end up with inaccurate records, or records not being kept, being lost, time being lost, or all of it being done on the last day of the month or whatever it may be, but it makes our work less satisfactory, because we don’t like this part of our job. Nobody wants to do it. Being a lawyer is hard enough. If you can find a way to change your billing system and get paid without keeping time, that makes it a better job.

The sixth downside, the collection processed for receivables, what I refer to as the cajoling machine, is awful. Nobody likes dealing with collections. The lawyer doesn’t like it, the client doesn’t like it, it’s stressful, it results in us not getting paid all the time, because we extend credit, either deliberately or inadvertently. It is a major problem in most law firms. This cajoling machine, cajoling clients into putting money into trust, or paying their bills makes that 20% that we’re spending on accounting grow even further if it becomes a big issue in our law firm. It does in a lot of practice areas.

The cajoling machine becomes a very, very expensive part of the process. It doesn’t create any value for the client and it means that we have to charge more to deliver the same service that could have been delivered by a fixed fee law firm at a lower price. Everything about the collections is awful for everybody.

Now that’s six reasons to switch. I could go on all day. If you want to switch, now you’ve got at least a few of these reasons that really push your buttons. Let me just say this, if the hourly fee thing is working for you, if you don’t want to switch, that’s fine. I’m not here to tell you this is the only way to do business. I’m speaking today to folks that find that there is a compelling reason to make the switch. Do it if it works for you. Stick with what you’re doing if that works for you better. This is not required of anybody and the fact of the matter is that everybody has known about fixed fees for a long time and most law firms stick with hourly billing. You do what makes sense to you.

I will tell you though that I’m a proponent of fixed fees. Why? Because in my experience, clients win with fixed fees. It has the impact on clients that you want to have. They are happier. They are more likely to write five-star reviews. They are more likely to give you positive feedback in a client’s survey. They are much more likely to tell their friends and family and colleagues and co-workers about your law firm when a legal issue comes up. I think that’s huge. If clients win, you win. There are a whole bunch of reasons and ways that they come out ahead.

Let me just run through a quick list of things that I’ve seen. I’ve just seen happy clients as a result of this shift. First of all, number one, they have certainty about the fee. They know in advance what the case is going to cost, enabling them to make cost-benefit decisions. They can make smarter decisions. When you say to them, “Here’s option A, here’s option B,” and they look at you and say, “What does option A cost and what does option B cost?” So that they can adequately compare your answer in an hourly billing model is, I don’t know.

Well, it’s all but impossible to pick between A and B if you don’t know what either one costs. None of us could make good decisions in that environment and clients can’t make good decisions in that environment. Having the ability to make smarter decisions is of critical importance to somebody dealing with a high stress challenge, like they’re going through when they hire you, that’s number one.

Number two, client anxiety goes down. The fee is done. It’s paid. It comes off the table. It’s one big thing that they no longer have to worry about, and that’s critical. Number three, clients on a fixed fee don’t feel stressed about calling their attorney. They are able to call you and ask the question and have the conversation. That results in happier clients, than those folks who think, “I don’t want to call, because I know I’ll get billed for the call.”

Number four, because they’re not worried about the fee, because they know what it’s going to cost, the relationship, the attorney-client relationship is much more collaborative and cooperative. We have removed that inherent hostility, that inherent division that comes out of each party worrying about the fee. We are now a team. That makes a big difference.

Number five, the lawyer in a fixed fee environment is fully informed of the facts. I have watched in case after case, clients who don’t tell their lawyers something because they know that calling or e-mail will cost them money. I have literally had clients say to me back when I was doing hourly billing at the trial, “Oh, I didn’t want to spend the time calling you because it was going to be expensive.” I’m now finding out about something at trial, or on the day of trial that I should have known all along. I should have heard the whole story, but I didn’t get it because the client was worried about getting billed for it.

Number six, when clients are paying hourly, they do dumb things. They sign things that they don’t want to call and ask you about, because they know that will be an expensive phone call. It makes you able to deliver a much better outcome if the client is able to avoid doing dumb things, by speaking to you before they do things.

Finally, number seven and this is irrational, but clients feel better about a higher fixed fee than they do about a lower hourly fee. A fixed fee that costs them more feels better than a hourly fee that costs them less, because of everything that I just mentioned; that reduced anxiety, that certainty, that lower level of worry or stress about calling the lawyer, interacting with a lawyer, the fixed fee is more likely to get you that five-star review, or that word-of-mouth referral. It just has that impact, even if the fee itself is more than they would have paid otherwise.

The client reaction is nearly always positive. My experience is that most clients love it. Now, I’m not going to tell you that every client loves it. I have met clients more than one who don’t like it. Some clients believe they will pay less hourly, some clients believe their case will be simple and easy and that an hourly fee will play to their benefit, some clients believe that you’ll charge the fixed fee and that your goal then will be to do the least amount of work possible, not to do everything you can in their case. They think you are disincentivized to dig in and do the work.

I don’t want to tell you that every single person on the planet will fall in love with your fixed fee model. Some will not. You will encounter some resistance. Overall, my experience is that the client reaction is very, very positive.

It’s pretty clear to you at this point listening to me that I’m a proponent of the idea of fixed or flat fees, you know that. It’s important for us to take a moment and talk about some of the disadvantages, because there are some. As I mentioned, some clients won’t be thrilled with this idea. They will have some resistance. Most clients will be very excited about it, but some will not.

I want to mention some of the reasons for not shifting from hourly toward fixed fees. There are some reasons to do this, or to not do this. I don’t want to slow you down. I don’t want to kill your enthusiasm, but I want you to be fully informed and thinking about the issues. To start off with this, switching from hourly to fixed fees is really about shifting risk. When you’re billing hourly, you have very little risk. If things get out of control, the case spirals in the wrong direction, the risk is on the client.

When you switch to a fixed fee situation, the risk is on you. Now I encourage you to take on this risk, because you are the expert with regard to how this case will progress. You know a lot about the work that you do. You certainly know a lot more than the client does. Between the two of you, you are in a better position to take on this risk and the client as we talk about fees going forward, you’re going to find is willing to pay a premium for you to take on this risk.

You need to be cognizant of the fact if you aren’t already, that you are assuming the risk and that sometimes, there will be downside to that, because things will spiral out of control. That’s one disadvantage. Another is this, the fees in a fixed fee situation will almost always be higher than what you were asking someone to deposit into trust, or to pay initially in an hourly billing situation. The initial fixed fee in these kinds of situations is almost always significantly higher than it would otherwise have been. That’s harder to sell. A higher fee is almost always harder to sell than a lower fee.

There will be some sticker shock. That means some folks will walk away. You’ve got to be prepared for that. You’ve got to expect that. That’s a disadvantage. Another is this, switching to fixed fees is not easy. It’s challenging in the beginning. In the end, I think it’s much easier because you end up with a price list, and so there’s not this debate in every matter about how the fees are going to be paid and how much should be deposited and etc., etc. It becomes really easy with fixed pricing to have those discussions with clients. In the beginning, figuring it all out is difficult. It doesn’t come easily for most of us. It’s a new way of thinking about pricing.

Another disadvantage; some law firms borrow from banks, or other lenders on their receivables. They may be owed hundreds of thousands or even more dollars and they may have a credit line, or other loan that is using that receivable as a form of collateral, or it’s enhancing their balance sheet and making them a better risk insofar as the bank sees things. When you switch to fixed fees, you don’t have receivables anymore. That’s a change you want to be prepared for.

Another disadvantage; if you are a small firm and you decide to wind that law firm down at some point, let’s say you choose to retire and you are shutting the practice down. Well, if you’ve been taking fixed fees and you have these cases that are going to take a while to wrap up, you’re going to have to work for some period of time having been paid earlier for those cases. Now, if you’ve been managing your money properly, then you’re golden. If you’ve been living on and spending the money as it comes in and not saving that money to live on later, well then you’re going to have a cash flow problem. Be aware of that.

Another disadvantage; some clients will abuse the system. Not very many, in my experience it’s really not a big problem, but be prepared for some clients to take advantage of the fact that they are paying a fixed fee and they’ll want more from you than they might have wanted if they were being billed hourly. I practiced family law. I am really a big believer that if there were ever going to be a lot of clients that took advantage of the system, they would be family law clients.

My experience was there were some, but not very many. We were able to build that into our fee structure overall and to deal with that satisfactorily. That can be a disadvantage, at least to some extent.

Two more; when you are filing attorney fee claims on behalf of your clients, you will still probably have to keep some time records. That’s just a reality of the law in many jurisdictions. You may end up in a fixed fee situation, but still tracking your time because you need it for attorney fee affidavits or for other reasons. Be aware of that.

Then finally, there will be refunds in a fixed fee environment. You may have a client agreement that says there are no refunds allowed, but this fee is non-refundable. In every jurisdiction that I have dealt with, a fixed fee is probably still refundable in some form or fashion, under the excessive fee rules. The odds are that if there’s a dispute between you and the client, there is at least some probability that you will end refunding some portion of that fee. If you’re spending the money as fast as you’re bringing it in, you need to be prepared for that. Some folks will perceive that as a disadvantage and I wanted to raise it for you.

Going back to the discussion about the IT guy billing me by the hour and the plumber with the fixed fees, all of that really got all of this floating around in my head. I knew that there had to be a better way. We were doing the hourly billing like lots of folks and we would have these interactions with clients. I’m sure you have these same interactions. We would sit down with the client at the outset of the case and ask them to deposit a certain sum of money into our trust account and we would explain that that money would be used to pay their bill each month as we billed hourly.

Then at some point, usually after a few months we would ask the client to replenish the trust account frequently. Far too frequently, when we ask them to replenish the trust account, they would object, they would get upset and they would say, “I thought what I paid in the beginning, was all that I would have to pay. We would say that’s not the way we explained it. In fact, we would pull out written client agreement and show them the language that they had theoretically reviewed and signed.

I say theoretically, because it seems unlikely that they really reviewed it or understood it at least, because we had these conversations over and over again. There would be some client upset. Then even after going through all of that and having them replenish the trust account, when it happened again, when they needed to replenish the account again, we went through the same upset with many clients, even after having already done it once. That drove me a little nuts. That I think for me at that point was one of the biggest downsides of the work; these endless upset fee conversations that really got in the way of the relationship between me and the client.

I really wanted to make the change. There were so many things that were coming as fallout from the hourly billing system. I found myself involuntarily doing pro bono work. I was not getting paid for some of the work that I was doing. I found myself in the business of extending credit. It just made me want to bang my head against the wall, where I was extending credit to people and other businesses we’re not. It’s like, “How did I get into this situation?”

I was consistently having to write down bills in order to get final bills settled; discounting the fee, retroactively not getting paid in full. All of that was making me a little crazy and dissatisfied with the work. I knew that if we could make this switch, that I would not have to have these upset fee conversations, I would not have to call clients about collecting fees or having them make good on the receivables. I would get paid for the work I was doing and I was certain as I thought through all of this, that if I build with fixed fees and my competition was billing hourly, that that would be a competitive advantage, that clients who looked at me and who looked at them would feel more comfortable with a fixed fee than they would with the uncertainty of an hourly bill. I just knew in my bones that this would be good for me and good for them. I wasn’t sure how to get there. I had lots of doubts about how to set fixed fees, how to convince clients to pay higher fees about the unexpected things that might happen. I was very unsure about how to get from here to there. In all of that thinking and rolling this around in my brain, I started thinking about all the other businesses out there that charge fixed fees. The one that most stimulated my thinking was the airline industry. These people charge a fixed fee for a flight. I can buy a ticket from New York to Los Angeles on a certain day for $300, or whatever it is. Maybe even $300 round-trip if I get a good deal.

These people in the airline business, they are dealing with weather issues, with mechanical issues, with fuel prices, with wages for employees, with all of these vary abilities and their cost structure, things that might change. I might buy the ticket today for a flight that’s nine months, or even a year out. There’s so many things that can go wrong I’m the flight might go perfectly or we might end up sitting on the runway for hours, costing them lots of extra money, there are so many variables in the airline arena. It just felt to me like, if they can do it. We could do it y

I can tell you that internally, I still felt the resistance this would be the biggest change that I think we probably ever made. I could see very quickly how complicated it was to set fees for all the different things that we do. As much as I wanted to stand out in the marketplace and to be different and to have a competitive advantage, I could also feel that part of me that fears standing out, that fears being different than all of the other lawyers. That piece of me pushed against this.

It was not an easy change to make. It felt like a very big deal when we did, but we did it. We reached the other side. We’ve done it now for a very long time. What I want to do as we go forward in this masterclass now is talk you through the specifics of how you can do it and how you can make it work for your practice.

Now for some specifics; how do you set fixed fees? I think the biggest thing holding most lawyers back from making the switch from hourly fees to fixed fees is simply the challenge of figuring out what the fees ought to be. It is not a simple process. For most of us, it’s a very different way of thinking and we have rarely, if ever, devoted any bandwidth to predicting the cost of a case. It just wasn’t important. It didn’t matter when you were being paid by the hour. Suddenly, it’s the central piece of the puzzle and you’ve got to figure it out and it requires a dramatic shift of the way that you think. Let me walk you through some of the ideas that I’ve got about this and I’ll help you to see how we made the shift in our law firm. First of all, what is the objective? What you’re really trying to do is to create a very simple one-page spreadsheet that lays out minimum fees for each type of activity that you’re selling. You’re trying to create a minimum price list.

That doesn’t mean you can’t quote a fee higher than the minimum, but you need to know what is the least amount of money that you will accept for a particular type of project. I’m saying this at the outset, because I want to give you a feel for what this literally looks like when you’ve done this work successfully. You will end up with a very straightforward, very simple one-page price list. It may not be published anywhere, other than internally because again, it’s minimums. It’s not the fee. This is the least you’ll charge. You may in fact in a particular case after hearing the story and the facts of that case decide to charge much more than the minimum, but you must have a spreadsheet that has the minimum.

The very first obstacle that most of us run into when we try to assemble this spreadsheet is this idea that litigation is completely unpredictable. Many of us have trouble seeing the pattern. Some of us have not done this for very long, but even those of us who’ve done this work for a long time often struggle to see the patterns especially with respect to the fees, because that just isn’t something that has been required.

Now it is true that in a litigation, sometimes things go wrong. With experience and with predicting these fees, you can start to accurately estimate the range for the time and effort that any type of case will take. This is really just a math problem to be solved. It’s really just numbers, seeing patterns and assigning values to those patterns.

Now it’s obviously much easier to do if you do the same types of work over and over again. The patterns emerge more quickly. Even with litigation, the unexpected is not entirely unexpected when your job is to assign prices to something that has potential for what we’ll still call unexpected events, or unpredictable events. The reality is when there’s a strong likelihood of an unexpected or unpredictable event happening in an engagement, well then it’s no longer unexpected or unpredictable. We build some of that in to every case as we are assigning minimum fees. We start to expect the unexpected. Don’t buy into the idea that this is an impossible exercise, because every case is different and entirely unexpected things happen in every case. Go back to the airline, go back to the flights you’ve been on, something unexpected tends to happen on every flight in one way or another. It goes faster than we thought, it takes longer than we thought, there’s turbulence, there’s this, there’s that. The reality is that an unexpected event is entirely expected in every flight and it’s expected in every litigation matter.

Get rid of that premise that litigation is completely unpredictable and can’t therefore be valued. It might be completely unpredictable, but you can assign numbers to this. Now, that’s not to say this is entirely science. Setting these minimum fees on this spreadsheet is part science, but it is also part art. That is the reality. It is a mix of art and science. Sometimes it’ll feel more science, sometimes it will feel more like art. Pricing is like that, except that as the reality, use the experienced educated part of you to help you come up with realistic numbers, but also recognize that part of this is based on your experience at interacting with these clients and what fees the market will bear. It’s not all science.

Now here’s how I did it; I looked for these patterns in my cases and I started to categorize and classify the types of cases that we took. I didn’t attempt to assign a fixed fee as one number for every case we took, I broke these cases into categories and I thought of each category of case very differently and analyzed it very differently and applied fees to those categories.

Now I practiced family law, so I thought about custody cases and child support cases and alimony cases and property division cases and domestic violence cases and on and on. Then I broke that further down into litigation cases and cases that were settled without litigation. You need to do that in your practice area. This spreadsheet is a menu of different types of projects that you’re going to take on and you need to break it out into whatever is natural for your practice area, as you hunt for these patterns that you’re seeing in the work that you do.

You need to further break that out into stages, or phases of cases. For instance, in litigation cases, we had types of cases that settled very quickly in many instances, but we also had cases that went on through the discovery process, the pre-trial process, the actual trial process, sometimes post-judgment processes. We broke all of that out. I can’t do that for you. I can’t walk you through that, because I don’t understand your practice area in your jurisdiction. You’ve got to break it all out as you see the patterns and the types of work that you do.

Then we went further as we did this work of preparing to make the shift to fixed fees. We looked for key variables that impacted all of the types of work and all of the stages, or phases that we worked for. For us, we looked at the substantive issues that I just mentioned, things like child custody or property division, whatever the legal issue might be, but we also looked at the complexity of the case. We looked at egregious misconduct and how that might impact the fees. We looked at the emotional content of the case. For us, that was a big variable in family law.

We were looking for key variables that might increase, or decrease the fee. We wanted to find those variables that could cause the fee to go up or down. We looked for legal or financial complications, things that made the case more challenging in one way or another. We looked at the reasonableness of the client’s objectives. We looked at things like the opposing counsel and the history with the opposing counsel, the client personality, whether we were the first lawyer in the case, or the second, or third lawyer, we looked for these key variables that could impact every type of case we took at every stage of the work that we went through.

Then starting to use this spreadsheet, this menu that we were creating, we went back through five years of case data. We had time and billing statements for all kinds of cases and we went back through those records. It was a very manual process looking to pull averages together around each type of case, each phase of those cases and factoring in these variables. We came up with minimums that we plugged in to this spreadsheet.

Now remember, I said that this is as much art as it is science. You’ll be doing this, thinking it through, using your data, but you will also be guessing some. That’s just the reality of this guessing. It sounds more frightening when I put it that way, but in a minute I’m going to talk about how you will quickly get this fixed and straight and make it work and you will be highly motivated.

Now, some folks who are listening to me today are thinking, “I don’t have five years of data. What do I do?” Well, the fact is that you’re going to have to guess more. That’s what you’re going to have to do. You might have some information you can collect from friends who practice in the area, from other lawyers that you know. You might be able to pull attorneys fee affidavits from public records, but you will be guessing. That is just the reality, if you don’t have much in terms of objective data that you can use. Be comforted by knowing that many of us who have the data still have trouble figuring out how to use it and how to apply it.

There is a lot of that art piece of this that I’m talking about. It’s not all science. There is a really significant amount of art. Then you’re going to want to keep pulling this spreadsheet together, making these minimums, coming up with numbers, breaking this into phases and stages all structured around the type of work you do, the rules and the system in your jurisdiction and the reality of the way law is practiced in your practice area in your jurisdiction.

This will look different for every lawyer, in every practice area, in every geographic area. There is no one-size-fits-all here. You’re going to have to find a way to structure this for you and it will require some adjusting over time. For everyone in every practice area, in every jurisdiction, you need to apply two rules to make this work. Rule number one, give yourself time to get out of the case for non-payment. When you are structuring stages of representation and fees that are going to be paid, you need to make sure that this fee will be paid far enough in advance that if you need to withdraw for non-payment, you can do that.

Now if you say to me, “Well, my judges won’t let me out of a case once I’m in. If I make an appearance, I am in this case forever.” Well, that’s not a problem. That just means that whatever the fee is going to be, it needs to be paid before you get in. Because if you’re going to structure it in payments throughout the case but you can’t get out, well you’ve just broken rule number one. You need to give yourself time to get out for non-payment. You need as much of that money paid as you’re going to be locked into doing the work. Give yourself time to get out for non-payment.

Make sure you understand the rules and the actual practices for withdrawal in every type of case you handle and in every location in which you handle it. I know places where it’s county by county, it’s sometimes it’s judged by judge and you need to have a system built around getting out if your client doesn’t pay what they are owed. I misstated that, what you are owed, not what they are owed. You want to make sure you have time to get out. You do not want to be locked in, unless you are paid. Think that through. That is an important rule.

Second rule, don’t put yourself in a position where nothing is due. There are no further fees due, unless you have been paid substantially for your work. You want clients who are making decisions knowing that there may be stages of the fee still due. This can be tricky in those jurisdictions and I think they are few and far between, where once you enter an appearance, you are locked in through the end. In those cases, you’re going to want to make sure your fixed fee is substantial. What you don’t want to have happen is a client who says, “Hey, I’ve paid a 100% of the fee. I’m not going to compromise over the $25.00 item that is keeping us from settlement.” You want the client to have some future fee due that helps you to leverage them into settlement, if that’s a reasonable decision.

Now once they get to the end and they’ve paid you for the trial, well fine, now you’re going to go and you’re just going to try that case, but you want to make sure they’ve gotten to that point where they have paid for that work. You want to always maintain some leverage with the fees if you can, until that last fee is due that is just the maximum hey, we’re going to ride this thing to the end. You’ve paid for it, if that’s what you want to do. Otherwise, you want to keep something in reserve so that that continues to be a lever to get this thing settled.

Now as I said earlier, this will require constant tweaking. Whatever you put on the spreadsheet is not written in stone. This number will change over time. Mistakes will be made when you create this spreadsheet, that’s just the reality. I encourage you before you make this mistake, because almost everybody makes it, go higher than you think you should with these numbers.

Lawyers experimenting with this approach universally go too low. I don’t know why that is, but I see it all the time. I encourage lawyers to go at least twice what they think they should have done, because I see lawyers all the time going way too low and then saying to me, “Well, this didn’t work because I was doing too much work for too little fee.” Well, that’s because you set the fee too low. Go high.

Yes, sometimes you’ll end up charging too much for something that maybe would have cost less under an alternative method, but you really want to go high to cover those unexpected situations that are going to require the tweaking of your spreadsheet. What I want you to do is think of it as a game. You’re going to be tweaking this spreadsheet all the time, but let me tell you, this is a game that you’re going to learn really, really fast because this is a game that you were playing for real money. I remember when I learned how to play blackjack, it was interesting when I would play on the computer and practice and see what it was all about. Let me tell you, the minute I went to Las Vegas and put my $5 bet down, well then it was real and I learned a lot about blackjack in a hurry when I was playing for real money. I promise you, if you will just think of this as the game, yes, you will make some mistakes early on, but if you were open to tweaking and perfecting this thing, you will get it right very, very quickly because you will be highly motivated.

As you move forward, as you keep playing this game expect the unexpected. Don’t be surprised. When we set our fees and when we did this for ourselves for the first time and we started quoting the fees to clients, it was not always a smooth sailing. We had a variety of issues. We had issues with our state bar, we had issues with clients, we had to tweak the system a lot over the years. It is not something that was set it and forget it.

If you’re going to try this, then you should expect to treat it as a ongoing work and process. You’re going to learn a lot of lessons. Some of them you’re going to learn the hard way, but I promise you this will come together and you will accrue all of the advantages that we talked about earlier. I think this is an experiment worth undertaking and I think you will quickly find that you are comfortable committing to this approach to pricing as you go forward.

I hope that I’ve now given you a feel for the art and science of how we came up with our fees and how you might go through your data and come up with your fees and create this minimum fees spreadsheet, fixed fees spreadsheet. Let me tell you, even when you come up with this spreadsheet and you have it all set to go, you’re not done yet. You’re just getting warmed up. That’s the first essential task of doing this.

I want to tell you a quick story about what happened to me and our law firm after we had this spreadsheet in place. We spent considerable time doing the work that I just described and we had all these numbers and we thought okay, we’re ready to go. This is magic. We’re going to make it work. Now I’m a pretty black-and-white person. I didn’t say to our team, “Hey, let’s ease into this.” I said, “Let’s go. Let’s make this happen. Let’s do it.”

On the first day of the next month, we made a change. We were done with hourly billing for new clients. We obviously continued hourly billing for the existing clients, but new clients fixed fees. This is what we were going to and we had our minimum spreadsheet and we walked through it with all the lawyers who did initial consults, and we were off and running.

We went through the next month and did not have any significant number of clients retain us. That was a problem, but it was not a gigantic problem because we still had revenues coming in from the hourly clients and we were transferring the money from trust. We had no new client fixed to be revenue. That was a problem, but I’m hard-headed and committed and I thought, “Well, we just need to tweak this a little bit. Do a little more training, practice. We will get this to work.” We did it for the next month, almost no new clients. We did it for a third month, almost no new clients.

Now it was becoming a problem, because we were closing out old client files, our revenues were going down and we were not bringing in new clients. In fact, these folks who had met with us who did not hire us, well they were gone forever, so all the energy and marketing that had been put into getting those people to come in for an initial consult, that was wasted. That was money spent that we would never recover.

We were digging ourselves into a hole and I was starting to panic. I made a change after the third month and I said, “Okay, look. We can offer the potential clients coming in now in month four a choice. They can pay the fixed fee, or we can bill them hourly.” We started presenting that to the prospective clients in our initial consultations and the problem was solved. Clients started hiring us again in this fourth month.

Now here’s the weird part, those clients that started hiring us largely hired us using the fixed fee. They did not hire us by putting money in trust and letting us bill hourly. It was a strain. It was unexpected, but suddenly the fixed fees were working and we rolled on. Five or six months later, because there was no reason to present the hourly fee option, our lawyers simply stopped presenting it. Nobody was interested. Everybody wanted the fixed fee, and so we stopped giving clients the choice, because they didn’t really want to think about it.

What became obvious in retrospect and I will tell you, we really didn’t understand it at the time is that in those first three months, what was really going on was not that clients were resistant to the fixed fee. It’s that we had trouble selling it. I think ultimately, what we realized is that we were uncomfortable with a higher number and with a new approach to change the different way of doing things threw us off. It made us emotionally uncomfortable. The words didn’t come out as easily. We weren’t as certain about what we were doing and how we were saying it and what we were offering. Our presence, our being on that issue transmitted uncertainty.

Looking back on it now, the lesson that we learned was that you really have to work on yourself and on your people and make sure that everybody understands and buys into the idea and believes that the fixed fee is beneficial to the client. That explains why I spent so much energy early on in this program talking through these reasons, these benefits to the client of using the fixed fee, because if you don’t believe it, then if your team doesn’t believe it, you’re going to have a very hard time having clients believe it.

They smell that discomfort, that uncertainty. They know that something isn’t quite right. We all know you’ve met with enough potential clients to know that a big part of what closes the deal is that comfort level that they have in knowing that you are the solution to their problem. Much of that, it’s part of who you are and how you are when you’re interacting with this prospective client. We lost that for the first 90 days. We got it back. Once we got it back, all was good with the fixed fees. The fixed fees were not the problem, we were the problem.

Let’s drill down and get practical. Let’s talk about the implementation of the fixed fee approach, some systems, some processes, some tips. First thing, client agreements. We’ve got samples that are a part of this program that you can download. You will want to customize those samples, so that they comply with the rules in your jurisdiction. You ought to use a client agreement, whether it’s mandated by your ethics rules, or not in any fixed fee case. You want to always have a client agreement executed by you and by the client.

Be sure that it gets executed. It’s easy to get caught up in the beginning of a case and have the client agreement be presented to the client, but not actually signed by everyone. Have a system in your firm that checks and double-checks to make sure that these agreements are getting signed.

Now, I mentioned earlier the possibility of upset clients, or refunds coming for some other reason. I promise you with fixed fees, you will have dramatically fewer upset clients if you have issues now with respect to fees. Hourly fees tend to create client upset. I think that’s just a reality of the hourly billing environment. Be prepared for some refunds, even in the fixed fee world. It’s going to happen. Some folks will be distressed for one reason or another and a refund will be the solution. In a perfect world, you will not end up with any fee disputes and you will avoid that by working out an agreement for some partial refund.

It is better if you can use a refund to resolve a dispute, before it blows up on you and you end up with a third party from your regulator examining your agreement and the reasonableness of your fee. My bias is to resolve things before they blow up further. Cut it off, make a deal, refund some portion of the fee and be done with it.

Let’s talk about banking for just a second. When you receive these fees, where does the money go? Does it go into your trust account, or does it go into your operating account? This will vary from jurisdiction to jurisdiction. You want to make sure that you know the rules in your area. In our law firm, the funds went straight into the operating account and we could spend them. My understanding is that at least in some limited number of jurisdictions, the money goes into the trust account. Make sure you know what the rules are before you start moving money around.

Be prepared for seasonality with respect to fees. If there is a slow time of year, in my practice it was always the Christmas holiday period, then be prepared for that seasonality to affect your revenues. With hourly billing, it’s easy to shift work into slow periods and maintain your revenues. You’re catching up during the slow times and evening things out. With fixed fees, that’s usually not the case. If you’re experiencing a slow period due to the seasons, then your revenues are going to go down and you need to be ready for that.

In our firm, we always allocated 1/10 of our revenues each month toward a savings account that we would use in that slow period at the end of the year. You need to look at whether your revenues are typically level all year long or not. If they’re not, then you want to make some adjustments for how you manage cash, because seasonality definitely comes into play in a lot of practice areas and you feel it much more strongly when you’re using fixed fees.

One more thing that relates to the seasonality; think through how you will end your practice. When you decide to stop practicing, or if you decide to go take an off-council job, or an in-house job, or whatever it may be, you need to have a plan for how you’re going to deal with covering this work that has yet to be done for which you have already been paid. Now when you transition from hourly billing to fixed fees, you’re going to have a big windfall. You’re going to be taking in all this revenue in hourly cases and you’re going to be receiving these fixed fees simultaneously.

For many firms, the revenue doubles for a while. Maybe you want to save that extra money and put it aside, so that you’re prepared for the idea that you might at some point choose not to continue practicing in this way with this system. That way, you don’t end up with a lot of work that you don’t have the financing to handle.

Now, I’ve talked about putting fees into stages. Let me say a few things about stages for fees. It’s important to remind clients who have an upcoming fee due is part of that staging process. In our litigation cases, we had a beginning fee which was due at the outset when the client hired us, but then we had three stages that followed that. You want to give the client at least 30 days’ notice that a fee is coming due in the near future.

You want to remind the lawyers working on that case that they’re going to be tasked with collecting that fee on that date, so that they are prepared for it and so that they are addressing it with the client when they’re interacting and helping the client be ready for it. Then when that fee is due, you need to collect it. We have always had a very strict policy of the fee being due and paid within 48 hours, or we move to withdraw from the litigation matter.

Why? Because remember what I said much earlier about giving yourself time to withdraw, you don’t want to let that deadline slip. You don’t want to get stuck in a case. If the fee is due and it’s not paid, you want to immediately begin jumping through the hoops that are required to get yourself out of that case.

Now, what about expenses? What about expenses for court reporters, or experts, or whatever it may be that you collect expenses for? That’s going to need to be handled outside of the fixed fee probably. You need to build a system for that. It may involve the trust account, it may involve the attorneys working for you being very careful about not incurring expenses before recovering those costs, but you need some system that is designed to be sure that those expenses don’t slip through the cracks.

Two more thoughts here as we work through the practical realities of this. Number one is that clients don’t mind add-ons that are big. For instance, if you have in your fixed fee agreement with your client that there may be for example extra fees charged for extra depositions, or extra motions to compel or whatever it may be, my experience is that those kinds of extras do not seem to trigger upset on the part of a client.

The things that actually are extra that do trigger upsets are small extras, like postage or delivery fees, or whatever it may be. The big things don’t seem to cause the clients to become distressed. The small things do.

Finally, you may need a mechanism, a system for keeping time records if that is going to be necessary in some of your cases. If for instance, you need to have time records to prove an attorney’s fee affidavit, well then you need to build that system into your process. If you’re building hourly now, you may want to transfer that system for those cases where you expect and anticipate the need to have those kinds of records.

My experience is that we never had to do that often, but we always had to do it at least a little bit. We always had a handful of cases where we were required for some reason that we anticipated to have those records. You want to be prepared for that possibility if your practice area might have in a situation where that’s required.

We’re getting close to the end of this material and I want to talk with you a little bit about the marketing and sales aspect of the fixed fee arrangements. It is important that everybody in your law firm be on board, be comfortable with the idea of fixed fees. You’ll recall that I discussed our transition in our law firm over to fixed fees from hourly billing. We discovered that we really needed to work on our people first, that they needed to get it. They needed to understand the value of what we were doing before they could communicate that to the client. They needed to get comfortable. You need to get your folks on board and comfortable with this idea.

The best way to approach that is to help them understand that this billing arrangement is for the client’s benefit. I like to sit in front of an associate and ask them if they personally could tolerate hearing from their lawyer what we routinely say to our clients about fees, which is that we don’t know what it’s going to cost. I ask them if a lawyer said that to them, how that would make them feel and whether they would feel comfortable, whether they would trust the process sufficiently to say, “Okay, I’ll sign that client agreement. I will be your client and I will just pay whatever you ask me to pay.” Universally, the associates look at me and when it’s turned around in that way and they realize that they’re not comfortable with that, that they find that idea offensive and disturbing. When they begin to think it through, they come to realize that they would be completely incapable of analyzing the situation and making smart cost-benefit decisions, because they don’t know all of the costs.

Once you help the associate grasp that this is for the client’s benefit, they jump onboard. It’s never as challenging to bring paralegals, or other administrative people into the zone of buying into this idea as it is with associates, so you really want to work on the associates and help them to completely get comfortable with this idea.

It’s helpful also to remind them that when you shift from hourly to fixed fee arrangements, there are fewer fee discussions, there will be fewer upsets, there will be fewer conversations where we’re asking someone to replenish the trust account. Every associate I’ve ever talked to is happy when they hear that news. The associates also appreciate being in a position where they don’t have to predict hourly fees. They’re uncomfortable when a client asks them how much this is going to cost, especially as they’re moving through the process and being asked that question every couple of weeks by the same client who keeps seeing the bill going up and up and up. 
They don’t know the answer to the question about how much is this going to cost. When you move to fixed fees, they will know the answer and that will make them feel much better about those conversations with their clients.

Once you’ve worked on your people and you’ve got them onboard, and that may be a conversation if you’re a solo by yourself that you have to have with yourself, but once everybody’s onboard, then you’re in a position to help the client understand the benefit of this arrangement.

Now we have always set fixed fees at the initial consultation after hearing the client’s story. We listen to the story, we assess the situation and generally we’re in a position to set the fee. That’s because this is the work we do. This is what we are expert at. When we hear the story, we’re able to figure out what we think it’s going to cost. That’s not true a 100% of the time. Sometimes there’s some critical information that we don’t yet have. If that’s the case, we explain to the client that once we get that information, once we have answers to our questions then we’ll be able to set the fee. We explain when we set the fee at that initial consultation that that fee could change up to the point that they retain us. If the client comes in today and we tell them the fee and they don’t hire us for three weeks, and in three weeks they come back and they tell us here are all the awful things that have happened in the last three weeks and how much worse things are, well the fee may be different because we may now have additional information. We want them to know that we’re not locking ourselves in, until everybody executes the agreement and signs it.

We explain how the fixed fee works. If there are stages, we explain the stages. In many of our cases, there were not stages. It was a one-time fee, but in quite a few, there were stages. We explain the benefit to the client, all of those benefits that I discussed with you early on in this program, we emphasize the lack of certainty in the hourly environment. We emphasize the discomfort that people have with not knowing how much it’s going to cost and we explain why we do it.

We explain that we are not comfortable being in a situation where we don’t know the fee. We explain that we’ve been through this. We’ve been represented by lawyers, we’ve had computer technicians, we’ve had plumbers, etc., who charge by the hour and that we are not comfortable with signing a client agreement that is effectively a blank check. We explained that we’re not comfortable worrying that the meter is always running when we’re engaging professional services.

We explain how our client agreement works. In our situation, the arrangement was always that if the case settled, even if we had laid out several stages and many fees to be paid all through litigation, that they stopped paying once the case was resolved. We would walk them through all the potential fees, but we would explain that they would only pay the fees up to the point where the case was resolved. The fact of the matter is, they won’t understand this but you will, these cases tend to get resolved faster when you are using a fixed fee and you’re limiting the number of cases that any particular attorney is handling and you are focusing your full energy and attention on the case.

I know that lawyers who bill hourly don’t want to say, or think, or believe even that their cases go on longer, because of the billing mechanism, but I will tell you having been on both sides of this that when you are billing with a fixed fee, when everybody is in alignment in terms of the finances of the attorney fee arrangement, these cases get resolved faster than they otherwise get resolved.

We walk the client through all of that. It works. People like it. People understand it, they feel comfortable with it, they appreciate having certainty, they understand the need to know the costs, so that they can make smart decisions and they hire a law firm that offers this arrangement over a law firm that doesn’t.

Remember, when you’re thinking this through that it’s really the thing you’ve been doing, billing hourly and explaining that in a client conference, that requires explanation. The hourly billing is for most people a crazy idea. Most people who aren’t regular consumers of legal services can’t understand why the expert can’t explain what this thing costs. They expect things to be priced, because everything in their world is priced. There are prices on cars that cost $30, $50, a $100,000 and yet, we tell them we can’t put a price on this thing.

It’s that idea, the hourly billing idea that requires lots of explanation, because it’s such a crazy idea. There is less need to explain fixed fees than hourly fees, because the consumer is comfortable with and used to the idea of paying for things that have been priced with a fixed fee.

Now, when you are talking to clients about fixed fees, it will be challenging in some instances. I’m not going to tell you that it’s not. It’s challenging in just like sometimes talking to clients about hourly fees is challenging. Fee discussions are difficult for many of us. You will sometimes have pessimists. They will assume their case is going to be a nightmare and they will jump on this. They will see this as the safe way to go, but then you will sometimes have very optimistic people. These people who believe that a letter can be written from you, the lawyer and it will be this powerful letter that is very persuasive and the other side will just cave. They don’t want to pay you $10, or $20 or a $100,000 because they just need you to write a $200 letter.

Well, some of those people will not listen to your explanation of how this usually goes and they will not listen to you tell stories about folks who come in optimistically believing that and that you have a realistic perspective that you can explain. They just won’t buy that. Those people may go elsewhere and buy their $200 letter.

Here’s what happens, those people come back. I can’t count the number of times that those people have come back and said, “I wish I had hired you on the first day. I am ready to hire you now.” Be prepared for that, but don’t expect that every time you go into a room to sell your legal services, that you’re going to walk out with an executed client agreement under your fixed fee arrangement. It’s just not going to happen a 100% of the time. It doesn’t happen a 100% of the time now.

I would say that the hardest situation is the optimist who you quote a very expensive litigation fee. You quote a $50, or a $100, or $250,000 litigation fee and this optimist thinks, “Oh, this will never be necessary. I don’t want to sign on for this fee.” We all know that if they’re already engaged in some litigation, if a lawsuit has been filed or whatever it is, their optimism is ill-founded, but they don’t get it yet.

Those are some challenging situations, especially if they have met with another lawyer and that lawyer has offered them a low retainer amount and is billing them hourly. You’re not going to get everybody, but I will tell you, you don’t want everyone to hire you. You don’t want that person with unrealistic expectations. That person who thinks this can be resolved for $200 when you know that it’s a $20,000 case.

Don’t be distressed when that person doesn’t hire you. Like I said, many of them will come back and the ones who just leave and never come back, that may be the best thing that ever happened to you. Explain the fee, explain the work you’re going to do in exchange for that fee, help the client to see the benefit of the fixed fee if there’s any doubt in their mind about it. I think you will not find much doubt. Then accept that those few folks that don’t hire you, that aren’t interested in this arrangement, that is probably for the best. Let them go and save yourself the headache.

I hope you can see how having this fee arrangement becomes a competitive advantage. I have always known that fixed fees have been a competitive advantage for our law firm. Even though we did it for a long, long time most of our competition didn’t do it. The word gets out, the clients appreciate knowing what the price will be. It is important to them to have that certainty and that comfort level and that trust that they get from knowing the fee in advance. You are taking away the fear. You are reducing the anxiety. The clients very much appreciate your willingness to go with this arrangement and shift the risk from them over to you. The clients become your biggest advocates in the community. This is the thing that gets people talking. It gets people suggesting you, recommending you. The word-of-mouth marketing is powerful. Don’t underestimate that. That doesn’t mean you shouldn’t exploit this competitive advantage fully in your marketing. I would suggest that you put any fee information that you can on your website.

We always had a fee calculator on the website. This is the number one question of prospective clients, they want to know what this is going to cost. You know they all ask that question, so we put a fee calculator on the website where they could answer seven questions and get an estimated range of fees. We weren’t locked in. It was a pretty broad range, but it gave them a really good sense of what this was going to cost.

Anything you put on your website, whether it’s a calculator or just a page of text, showing the range of fees will help the client to be comfortable and what you already know is that they’re not finding that on your competitor’s websites when they go looking. You will find very quickly that you can use this in lots of different ways. You can mention it in your networking meetings, you can use it in your advertising if you’re running ads on Google AdWords, or on Facebook, you can write articles about it on your website, you can exploit this in a big way, because everybody wants to know what it’s going to cost.

Putting that information out there sets you so dramatically apart from the lawyer whose response to the how much is it going to cost question is, “I don’t know.” That you will be dramatically more trusted than the competition. You are the lawyer who has the confidence to tell prospective clients what things cost. You are the expert. You aren’t the, I don’t know, lawyer and that inspires confidence in these prospective clients. This matters, because it is a very weighty factor in the mind of your purchaser, of your prospective client.

All right, let’s wrap this program up. We’ve gone on for a long time. Let me say a couple of things in conclusion. First of all, a lot of lawyers tell me I can’t do this. I can’t charge fixed fees. It is not permissible under the rules in my jurisdiction. I accept that you know more about your jurisdiction than I do. That I’m sure is the case. Let me just say, criminal defense lawyers have been doing this forever. If they can figure it out, you can figure it out too.

Lots of lawyers tell me why they can’t and then when I push back, they figure out a way that they can charge fixed fees. There is almost always a way if you are willing to be proactive and push a little bit and make it happen. It could be that you’ve got to get the rules changed. It could be that you need to request an opinion from your regulatory agency. I don’t know the answer, but I know that anyone who has made it this far in this recording is persistent enough to find a way to make it happen.

I understand that these agencies perceive all change negatively. Their first response to doing anything differently is to reject it. That’s just the nature of lawyers and the lawyers who regulate us. I understand. You can make change happen. Seek approval. Push the issue. Read all of the rules in your state. Read the opinions and then find a way to thread the needle. Make it happen. There must be a way to do it in your jurisdiction. Why? Because it’s worth it. All the benefits to your client, all the benefits to you and your law firm making this change worth the effort that it takes to do it.

I encourage you to push on, even if it appears to you that there are obstacles standing in the way. Figuring all of this out, whether it’s figuring out a way to make the rules in your jurisdiction work, or figuring out how to set the fees, or how to move your team in the right direction in terms of their thinking, or figuring out how to sell it to your clients, all of it can be challenging in one way or another. It is worth the effort.

Once we rolled out our system in our practice, we had a dramatic reduction in clients experiencing distress over fees. We also had a dramatic increase in revenues. We had higher fees, because we took on that risk and the clients were willing to pay for it. We had more clients, more people hired us, because they like knowing the total cost of the representation in advance. They appreciate gaining the ability to make cost-benefit decisions as they move through the process and they fully understand what it is that they’re getting into before they commit to hiring your law firm.

They’re comfortable, they’re confident and they know that you are the expert, because you’re not the, I don’t know what it’s going to cost, lawyer. You’re the lawyer who is promising them in advance exactly what it’s going to cost. Making this change yes, yes, it can be challenging. I promise you, it’s worth the effort.

I hope that all of this is coming together in your mind. I hope you’re seeing the opportunity and I hope you’re seeing the work that you need to do to make it happen. I think it’ll make a big difference for you and for your clients.

Until next time, I’m Lee Rosen.