Carol Bailey Kills the Billable Hour

A new firm aims to do away with pricey legal advice.

Even before Occupy Wall Street protesters held up signs with the slogan "Make a living, not a killing," family-law attorney Carol Bailey had adopted the saying as her personal motto. It was about a year ago, and she was charging $330 an hour. With 30 years' experience under her belt, she could have charged even more.

Instead, Bailey decided to go in the other direction. A couple of weeks ago, she opened a new firm that does away with the so-called "billable hour" and instead offers clients flat fees that are far cheaper than what they would typically spend for an attorney.

"We're trying to reach a whole different group of people," Bailey says of her four-person firm, Main Street Law Group. The firm's self-declared target market is "Middle America," or simply those fed up with the current system, including lawyers themselves. Bailey recalls one colleague who spent a million dollars on his divorce. "The guy was so bitter about the bill he got from his lawyer," she says.

And why not? Her colleague, of all people, knows that attorneys are motivated—indeed, often required by their firms—to bill as many hours as they can to make as much money as possible. Every time a lawyer asks how you are, shares a funny anecdote, or launches into a long-winded explanation, that costs you. It's a model, according to Bailey, that breeds distrust, inefficiency, and—since lawyers make more when time is spent fighting in court—conflict.

A range of legal industry watchers across the country have started calling for change. And a smattering of firms, like Bailey's, have started to answer that call. Main Street, which shares office space in downtown Seattle with a more traditional and still-active firm Bailey founded, promises to tell clients in advance how much it will charge them. Some of those fees—specifically in cases involving wills and estate planning—can be found online. Others, in more complicated areas of the law, will be determined after the first meeting, she says.

Bailey says Main Street also will encourage clients to do much as work on their cases as they can without an attorney. What most lawyers never tell you, she says, is that clients can do much of the paperwork themselves. Or they could, in divorce cases, negotiate with exes-to-be using a less-expensive mediator. "When you get to the point that you don't feel like you know what you're doing, call me," Bailey told a recent client. For her specific part of the case, Bailey might end up charging $3,000 to $5,000—far less than the $25,000 to $30,000 that is usually the minimum in divorce cases.

Is this pure altruism? Not entirely. What Main Street's lawyers get out of the deal, says Bailey, besides an untapped market, is flexibility. Aside from her, all the attorneys in the firm are young mothers who don't want to be trapped by the standard you-must-bill-so-many-hours mandate. One lawyer wants to work three days a week. Another wants to quit early when her kids come home from school. A third is planning a maternity leave. And Bailey? She's taking a month-long vacation in Greece next summer.

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