Efirm Fee Quote Builder

eFirm: Fee Quote Builder

When to use this

Use this skill to:

• Build a formal fee proposal in response to a client Request for Proposal (RFP) or new matter instruction.
• Advise a client who asks "how much will this cost?" in a way that protects the firm and sets realistic expectations.
• Evaluate which fee structure best matches the matter type, risk profile, and client preference.
• Prepare the fee section of an engagement letter ([[efirm-engagement-letter-draft]]).
• Review whether an existing fee arrangement remains appropriate as a matter evolves.

Fee structures — when to use each

1. Hourly — rates by seniority; estimate + ceiling

The baseline structure. The client pays for time spent at agreed rates.

Best for: matters where scope is unclear at outset (complex litigation; restructuring; regulatory investigation).

Anti-pattern: presenting a rate card with no estimate. This is the single most client-criticized practice in legal billing surveys. Always accompany hourly rates with a range estimate and scope assumptions.

Format:

• Rate card by seniority (Partner / Senior Associate / Associate / Paralegal)
• Estimated range (e.g., "USD 80,000–120,000 based on the assumptions below")
• Scope assumptions (explicitly stated — if these change, the estimate changes)
• Ceiling option: "We will not exceed USD X without your prior written approval"

2. Fixed fee — single sum for defined deliverable

Client pays a flat amount for a specific deliverable.

Best for: commoditized, well-scoped work (standard NDA drafting; company formation; straightforward employment contract; conveyancing).

Anti-pattern: fixed fees without a tight scope definition. Every fixed-fee engagement must have a list of what is included and what is explicitly excluded (scope changes go on a separate instruction).

Format:

• Total fixed fee: USD X
• Scope: [precise description of deliverable]
• Included: [list]
• Not included: [list — especially: negotiations, regulatory filings, litigation, amendments]
• Out-of-pocket expenses: pass-through at cost

3. Contingency — % of recovery

The firm's fee is a percentage of the recovery the client achieves.

Best for: plaintiff-side litigation where client cannot afford hourly fees and the claim is strong.

Jurisdiction restrictions:

Always check current bar rules before proposing contingency.

4. Capped fee — hourly up to a ceiling

The client pays hourly rates, but the firm absorbs overrun above an agreed cap.

Best for: clients who want hourly transparency with cost certainty; matters where scope is moderately predictable.

Risk: the firm absorbs overrun risk. Only offer caps on matter types where historical data supports the estimate. Use [[efirm-finance-realization-rate-tracker]] and WIP data to calibrate.

5. Collared fee — hourly with floor + ceiling

Both client and firm share risk: if the matter comes in under the floor, the client pays the floor; if over the ceiling, the firm absorbs. The "collar" is the range between floor and ceiling.

Best for: risk-sharing on medium-complexity matters with reasonable scope predictability.

6. Milestone-based — installments tied to deliverables

Payment is triggered by defined milestones (e.g., 30% on engagement; 30% on first draft; 40% on execution).

Best for: large transactions with defined phases; avoids the billing drag of monthly invoices on slow-moving deals.

7. Subscription — monthly retainer for ongoing advisory work

The client pays a fixed monthly fee for access to defined legal services.

Best for: general counsel advisory relationships; compliance monitoring; recurring small-matter work.

Scope discipline is critical: define clearly what is and is not covered. Subscription clients tend to over-demand; the scope boundary prevents underpricing.

8. Hybrid — fixed for routine + hourly for non-routine

Combines predictability for standard work with flexibility for complex or unanticipated elements.

Example: "Fixed fee of USD X for the transaction documents; hourly rates apply for regulatory filings, which are scope-dependent."

Quote contents — mandatory sections

A complete fee quote contains all of the following:

1. Matter scope

SCOPE OF THIS QUOTE

This quote covers:
  - [Specific deliverable 1]
  - [Specific deliverable 2]
  ...

This quote does NOT cover:
  - [Exclusion 1 — e.g., regulatory filings]
  - [Exclusion 2 — e.g., litigation arising from the transaction]
  - [Exclusion 3 — e.g., advice in jurisdictions other than [X]]

Scope changes will be agreed in writing and quoted separately.

2. Fee structure choice + rationale

Brief explanation of why the chosen structure was recommended (one paragraph).

3. Estimate with assumptions and scope limits

FEE ESTIMATE

Based on our experience with similar matters and the assumptions below, we estimate
fees of USD [X] – USD [Y].

Assumptions:
  1. [Number of counterparties / complexity level]
  2. [Cooperation level from client in providing documents]
  3. [No litigation arising]
  4. [Single-jurisdiction matter]

If any assumption changes, we will promptly advise you of the revised estimate.

4. Out-of-pocket expenses

EXPENSES

The estimate above does not include disbursements, which are passed through at cost:
  - Court filing fees, registration fees
  - Notarization and legalization
  - Translation services
  - Travel (if required; approved in advance)
  - Third-party data room / technology costs

5. Trust / retainer requirements

RETAINER

We require an initial retainer of USD [X] before commencing work.
This will be held in our [IOLTA / designated client / trust] account and applied 
against final invoices.

6. Billing cadence

Monthly / on milestone / on completion. State whether invoices are due net-30 or other.

7. Tax / VAT treatment

Always state whether quoted amounts are VAT-inclusive or exclusive.

8. Scope-change mechanism

SCOPE CHANGES

Any work outside the scope defined above requires a separate written instruction.
We will provide a supplemental fee estimate before commencing any additional work.

9. Validity

VALIDITY

This quote is valid for 30 days from the date above.
After that date, rates and estimates are subject to revision.

Anti-patterns to avoid

MENA-specific notes

• KSA: contingency is disfavoured and in many matter types effectively prohibited. Milestone-based or hourly-with-ceiling is the typical alternative.
• UAE: client funds held as retainer are subject to escrow/trust rules; state clearly which account holds the retainer and how it is released.
• Lebanon: bar fee schedule provides minimum fee guidelines for certain matter types; check that the quote does not fall below bar minimums.
• GCC generally: government clients often expect formal fee negotiations and may require ministry approval of legal fees above certain thresholds; build in a longer quote-validity period and approval process.

Related skills

• [[efirm-engagement-letter-draft]]
• [[efirm-matter-creation-flow]]
• [[efirm-finance-realization-rate-tracker]]
• [[efirm-finance-wip-aging-report]]
• [[efirm-client-intake-form]]