Alternative Fee Arrangements

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As a boutique international trade and sales tax law firm, alternative billing arrangements are offered.  Many clients require a more flexible, affordable, predictable and proactive approach to payment for legal services and do not wish to continue with the hourly rate model.  A flexible approach is possible and a series of management approvals are not required at our end.  We can quickly approve an alternative fee arrangement.

LexSage is able to offer alternative fee arrangements because international trade law and sales tax law is what we do, day in and day out.  In all likelihood, we have seen your legal problem before or a similar legal problem. We do not reinvent the wheel with each and every client.

A realistic and mutually beneficial alternative fee arrangement starts with the basic premise that the interests of both the law firm and the client must be met:

Client’s Interests

LexSage’s Interests

Fairness/Reasonableness
Management of expenses
Management of cash flow
Predictability / need to budget
Need to obtain approvals for large expenditures
Need answers to legal questions / need help solving a legal problem
Do not want to feel lawyers are gouging
Responsiveness

Fairness/Reasonableness
Payment for services rendered
Recognition of value added by lawyer
Recognition of time required to perform legal services
Clarity and precision in scope of work
Establishing boundaries – lawyers are not always on the clock

 

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LexSage offers a variety of alternative fee arrangements that are designed to be mutually beneficial.

  1. Discounted Hourly Rates with Performance Bonus

In a limited number of circumstances, LexSage offers discounted hourly rates with a performance bonus.  For example, if a Canadian manufacturer hires LexSage to prepare an antidumping and/or countervailing duty complaint, LexSage will offer a discounted hourly rate during the preparation of the complaint and will charge a performance bonus if the complaint is accepted by the Canada Border Services Agency.  If the complaint is rejected, the performance bonus will not be payable. 

  1. Pre-paid Credits

LexSage offers pre-paid credit arrangements. Similar to a pre-paid phone card, the client recognizes that they has purchased a specified number of credit hours and must use the hours as wisely and efficiently as possible.  Legal costs may be reduced by a client agreeing to pre-pay an amount for an agreed number of hours.  The client may see this alternative billing arrangement as beneficial because he/she will receive a discounted hourly rate when purchasing the pre-paid block or package of credits.  The client may take the opportunity to manage the usage of a lawyer’s time by completing the tasks the client can complete and asking the lawyer to perform the necessary value-added legal services that the client cannot perform.

LexSage offers pre-paid credits at a discounted rate because collection risk is reduced.  If a client knows that they will need more than 10 hours, they can reduce their overall costs.  The available packages include pre-paid credits of 10 hours, 25 hours and 50 hours.  Pre-paid credit packs are different than a retainer on deposit.

A client must expressly request pre-paid credit packages and specify the package they wish to purchase and pay for the package in advance (that is, before the work commences). 

The prices for pre-paid credits for Cyndee Todgham Cherniak are as follows:

10 credit hours = $4500 + applicable HST ($450/hour and applicable HST)
25 credit hours = $11,125 + applicable HST ($445/hour and applicable HST)
50 credit hours = $22,000 + applicable HST ($440/hour and applicable HST)

If you wish to pay in US funds, we also offer package of 25 credit hours at a cost of $USD10,000 which is a rate of $USD400 per credit hour.

Shoshannah Wagenberg’s (law clerk) prepaid credit rate for law clerk related services is available in 10 credit hour packs.  10 pre-paid credits is $1100 + applicable HST ($110.00/hour plus applicable HST).

The prepaid credits are applied to billed hours.  It is important to note (and we put in writing) that unused credit hours will be refunded after the file is closed.  By unused, we mean that the docketed hours are less than the purchased prepaid hours.

  1. Monthly Payment Schedule

LexSage offers monthly payment schedules at the request of a client. A monthly payment schedule allows a client to prepare budgets and put aside funds at manageable intervals.  The client will agree at the start of the retainer to pay a specified amount every month (preferably by pre-authorized payment) for a specified period of time.  A monthly payment schedule is like a lease arrangement – you know at the start of the lease that you will pay a certain amount per lease interval over the course of the lease.

For example:Hours would be docketed so that the client will know the details of the work performed for the client.  The applicable hourly rates will be charged.  However, the client will not be invoiced more than the agreed upon monthly fee except if the client terminates the arrangement before the agreed period of time or if the client fails to pay the monthly amount and the arrangement must be terminated. The client may ask for monthly or quarterly details of the work performed and the charges that would have been payable under the hourly rate model.

A non-resident client may wish to keep informed of Canadian HST developments.  LexSage would charge a specified fee (for example $1500 per month) to provide monthly or quarterly updates.

A client who appeals a Canada Revenue Agency GST/HST assessment may agree to pay $3,000 per month until the case is decided by the Tax Court of Canada.

A client who appeals a Canada Border Services Agency customs assessment (e.g., valuation, classification or origin) may agree to pay $3,000 per month until the case is decided by the Canadian International Trade Tribunal.

A client who wishes to keep informed about a particular free trade agreement negotiation and have its submissions made to the negotiators may agree to pay $2,500 per month until the FTA is signed.

  1. Flat Fee or Fixed Fee Arrangements

LexSage offers flat fee or fixed fee arrangements for a limited number of services.  Clients prefer this alternative fee arrangement because the amount of the fee is established at the beginning of the relationship and the client is able to budget in advance. A fixed fee arrangement requires a scope of work to be defined with a degree of specificity and detail at the beginning of the relationship and the fixed fee is established such that the invoicing (excluding GST/HST) for the legal services does not exceed an agreed upon amount.  However, in these circumstances, LexSage reserves the right to reject any offer for a fixed fee arrangement that is not considered by LexSage to be recognize the value of the services to be performed and was not reasonable.  A flat fee arrangement cannot be “For anything I ask you to do after retaining you.”

If a clearly defined scope of work and steps can be agreed upon, LexSage may be willing to agree to a fixed fee for those clearly defined and specific steps.  While there is the belief that fixed fee arrangements offer certainty of legal costs for a client, it is common for clients (and numerous contacts at the client) to expand the scope of work after the fixed fee arrangement is established.

For fixed fee arrangements to work, the client must manage its demands during the course of the retainer.  Every retainer will clearly state that extras will not be included in the fixed fee and will be charged separately.

Some of the fixed fees currently offered by LexSage include:

LexSage offers flat or fixed fee arrangements to prepare one letter to the Canada Border Services Agency Recourse Directorate to appeal a seizure of goods when an individual has his/her NEXUS privileges revoked.  LexSage also offers flat or fixed fees to prepare one letter to the NEXUS program to appeal the revocation of NEXUS privileges.

LexSage offers flat or fixed fee arrangements to prepare subsequent requests for redetermination (appeals of customs enforcement actions or SIMA enforcement actions).  If LexSage prepares the initial request for redetermination and subsequent requests for redetermination are required before the issue is decided, LexSage will be pleased to negotiate a flat fee.  This is possible because LexSage is already familiar with the client and the basic facts.

LexSage offers flat or fixed fee arrangements for subsequent notices of objection (GST/HST) that relate to identical issues as a previous notice of objection. If LexSage prepares the initial notice of objection and subsequent objections are required before the issue is decided, LexSage will be pleased to negotiate a flat fee. This is possible because LexSage is already familiar with the client and the basic facts.

LexSage offers flat or fixed fee arrangements for filing export permit applications for controlled goods in situations where the goods have been classified.

LexSage offers flat or fixed fee arrangements for tariff classification files.

  1. Daily Fee Caps

LexSage will consider negotiating a reasonable daily fee cap with a client.  When LexSage must devote an entire day to a client during a NAFTA verification or a SIMA verification or a hearing, LexSage is prepared to discuss a daily fee cap.  As a general rule, the daily fee cap will equal the equivalent of 10 billable hours.  If less than 10 hours are docketed, the client will be charged only for the hours worked.  If more than 10 hours are docketed, the client will only be charged the cap rate.

However, any lawyer at LexSage will need to eat and sleep to remain healthy.  If a client requires any lawyer to work more than 16 hours in a given day, a premium will be charged at the discretion of LexSage.

  1. Budgets

There are times when a client comes to LexSage and indicates that they have a budget to spend on legal services.  When this happens, every attempt is made to prepare a specified and detailed scope of work to be performed within that budget.  This type of arrangement works well when the client’s expectations are reasonable and reflect an understanding of the value of the legal services to be provided. Most importantly, this fee arrangement works when there is honest communication about fees and a willingness on the part of the client to decide what services are necessary and what services are not necessary.

  1. Group Retainers

In situations where a group of companies have a similar legal issues (for example, long term care homes are opposing a Canada Revenue Agency position with respect to self-assessment of new homes), LexSage will consider entering into a joint retainer and dividing the legal costs among the participants in the group.  All members of the group can keep legal fees controlled when they benefit from the services performed for each other.  LexSage would be pleased to discuss this further with an interested group.

  1. Limited Madate Retainers/Limited Scope Representation

A "Limited Mandate" retainer is also known as "unbundling of legal services" or "legal services à la carte".  LexSage will provide legal services for part but not all of a client's legal matters.  For example, LexSage will review a notice of objection or notice of appeal that a client wishes to file in order to assist with the clarity of the statements of fact or arguments written by the client or their accountant or bookkeeper.  We are willing to provide drafting assistance without making appearances in the Tax Court of Canada or Canadian International Trade Tribunal.

For more information on alternative fee arrangements click here
Note about contingency fee arrangements: Since LexSage is a boutique international trade law and sales tax law firm, we do not offer contingency fee arrangements.  The area of practice does not lend itself to contingency fee arrangements.

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*LexSage Professional Corporation is approved by the Law Society of Upper Canada