Engagement Information
Flexibility
Mr. Bogen customizes his compensation arrangements to fit the needs of his clients. As a sole practitioner, he has the ability to be flexible and to design billing arrangements that make sense for a particular client under the particular circumstance.
Considerations for Alternative Fee Arrangements
“Alternative Fee Arrangements” are billing arrangements where Mr. Bogen does not bill at his customary hourly rate.
When structuring an Alternative Fee Arrangement, Mr. Bogen asks his clients to recognize that he has a very busy practice and that there is an opportunity cost to him if he takes on a matter for less than he can earn from other clients. He also points out to the clients that there are many aspects of a particular matter that can influence the amount of time and effort he must devote to it that are beyond his control, such as how reasonable the parties will act, how skilled the attorney or attorneys on the other side of the matter may be (it may surprise some clients, but generally having a more sophisticated and experience attorney on the other side if preferable), or how unpredicted changes in circumstances (for example a Pandemic or a third party unexpectedly becoming involved).
On the other hand, Mr. Bogen recognizes that clients want predictability, are sometimes skeptical of attorneys “running up the clock”, or simply have limited financial resources to fund legal needs. Accordingly, as noted above, he is open to considering many different types of billing arrangements.
Types of Arrangements
Hourly Rate: The majority of his retentions are billed hourly at his then current billing rate. As of January 2021, his standard billing rate was $550 per hour. He reconsiders that rate annually but since he formed his firm in 2014, he has only raised the rates twice. Typically, he bills his clients on a monthly basis. Under some circumstances, Mr. Bogen will enter into arrangements to permit clients to defer payment of some or all legal fees for a fixed period of time, in most cases with interest accruing at a reasonable rate.
Monthly Fixed Amount: Some clients engage Mr. Bogen on a regular basis and prefer the predictability of knowing in advance the amount that will be payable regardless of how much time Mr. Bogen spends in any particular month working on their matters. These arrangements often include mechanisms to “true up” that protects the client if the client consistently underutilizes Mr. Bogen’s services and protects Mr. Bogen if the amount of work involved significantly exceeds his expectations. Sometimes these arrangements include “carveouts” for particular matters that fall outside of the normal scope of engagement and these matters are often billed on an hourly basis.
Fixed Fees: Some clients prefer to lock in a fixed fee for a particular matter or project. In these cases, the client accepts the risk that the fixed fee may exceed the amount that would have been payable on an hourly basis and Mr. Bogen usually factors in some sort of premium to protect him in case the amount of his billable time exceeds the fixed fee. Fixed fees often make the most sense when there are a series of similar transactions, such as acquisitions, that Mr. Bogen will be handling where, over time, any overages or underpayments will even out.
Scaled Fees: In some cases, Mr. Bogen will agree with a client that once the fees on a particular matter or transaction exceed a certain threshold, the billing rate will be reduced. Generally, Mr. Bogen will not agree to these arrangements since there is only downside to him. However, Mr. Bogen may agree to this in situations where he believes that this will help cement a long-term relationship with a client who will ultimately regularly retain him on a more equitable basis or if there are other justifications.
Reduced Rates with a Premium: Mr. Bogen will consider billing at a reduced hourly billing rate for certain matters. This makes sense where he and the client expect that the amount of time and effort to close a transaction or conclude a representation is relatively limited and there is some special or extenuating circumstance that justifies offering a discount off of his customary rate. In those cases, though, since he is agreeing to a reduced rate, if the amount of time meaningfully exceeds expectations, he will recoup the discount and be compensated for the risk that he undertook. This type of arrangement may incentivize a client to make compromises to conclude a matter more quickly in lieu of running up legal fees.
Success Fees: Mr. Bogen occasionally will agree to a discounted or fixed fee with an additional amount payable to him if certain results are obtained.
Contingency Fees: Mr. Bogen generally does not work on a “contingency fee” basis where he will not be paid any amount unless a certain result is obtained; however, under certain circumstances he may consider it.
Equity: In limited circumstances Mr. Bogen will consider accepting equity in a client in lieu of payment of some of the cash otherwise payable. In doing so, Mr. Bogen asks his clients to acknowledge the risk that he is undertaking by accepting equity for a portion of his fees warrants a lower than fair market value valuation of the equity that he receives.
Combinations: If it makes sense to Mr. Bogen and his client, he will agree to specific arrangements that combine aspects of the foregoing structures.
Retainers
Mr. Bogen requires that his clients deposit an amount with him as a retainer that he holds until the conclusion of the representation. This is common practice among attorneys and is designed to ensure that his full legal fees are timely paid. The amount of the retainer is fashioned based on the creditworthiness of the client, the expected total fees payable and other considerations. The amount held in the retainer does not earn interest.
Engagement Letter Agreements
Mr. Bogen requires that his clients enter into an engagement letter agreement setting forth the terms of the engagement. He customizes his standard form to the particulars of the representation and sends it to his clients for review. Since it is a legally binding agreement, he advises his clients that it is in their best interest to review the engagement letter with other legal counsel to the extent any aspect of the agreement is not clear or does not make sense to them. He requests that his clients sign these agreements and send them back, but they do provide that if the client does not object to the terms of this engagement agreement and proceeds to accept legal services from Mr. Bogen, they will be considered to have agreed to the terms of the engagement letter agreement.
Methods of Payment
As a matter of convenience to his clients, Bogen Law accepts payment by check, Zelle, Paypal, wire transfer and credit cards. Clients are responsible for any fees or expenses associated with the method of payment selected by the client, including charges for returned checks, credit card fees, wire transfer fees and any other fees or expenses or charges associated with the payment regardless of whether paid by the client directly or charged to Bogen Law. Currently, Zelle payments do not carry any additional charges and that is the preferred method to receive payment, if feasible. With respect to credit cards, Bogen Law adds a fixed percentage as set forth in the engagement letter agreement (3% as of January 1, 2021) to any amount that is paid that way to cover the various fees and charges from the credit card processing company. Clients are encouraged to check with Mr. Bogen regarding any fees or charges associated with the payment method that the client is considering.
Collection Efforts
Unfortunately, over the years a few of Mr. Bogen’s clients have failed to pay amounts due to him. This is regrettable and unfair. If clients feel that they have been overcharged or that for some reason there is an error in an invoice, they are expected to promptly notify Mr. Bogen, in which case he will do his best to fairly and quickly resolve the issue with the client. But when a client simply ignores an invoice for no reason and with no valid justification, Mr. Bogen retains the right to charge interest, late fees and collection costs from the client, among other rights and remedies. These rights are explained in his engagement letter agreements.