Flat-Fee Securities Attorney
Why Flat-Fee Models Exist in Securities Law and How They Change the Compliance Dynamic
The hourly billing model creates a structural barrier to proactive securities compliance. When every phone call generates a bill, companies minimize contact with counsel. In securities law, where the cost of silence far exceeds the cost of guidance, flat-fee billing fundamentally changes this dynamic.
Why Flat-Fee Models Exist in Securities Law
Securities law is fundamentally different from most areas of legal practice in one critical respect: the value of counsel is greatest before problems arise, not after. In litigation, the client hires a lawyer because a dispute already exists. In corporate transactional work, the lawyer is engaged for a defined deal. In securities compliance, the ongoing relationship between counsel and client is itself the deliverable, because the goal is to prevent the disclosure failures, missed deadlines, and compliance gaps that create enforcement risk.
Hourly billing works against this model. When every phone call, email, and document review generates a time entry, rational corporate officers minimize their use of counsel. They wait until problems become urgent before seeking guidance. In securities law, this pattern is dangerous because disclosure obligations are continuous and time-sensitive: a four-business-day window for Form 8-K filings, quarterly reporting deadlines, annual report requirements, and Regulation FD constraints on selective disclosure all require prompt access to counsel.
What Fits Monthly Flat-Fee Work
Monthly flat-fee engagements at Frederick M. Lehrer, P.A. typically encompass the recurring compliance obligations that SEC reporting companies face: review of quarterly and annual reports before filing, preparation and review of Form 8-K current reports, risk factor updating, board consultation on disclosure questions, review of press releases for Regulation FD compliance, and routine correspondence with transfer agents, auditors, and OTC Markets or exchanges.
The flat-fee model also covers the informal consultations that are most valuable in preventing compliance failures: the phone call about whether a business development requires an 8-K, the email asking how to describe a new risk factor, the question about whether a planned press release creates disclosure consistency issues with the most recent 10-Q. Under hourly billing, these calls are avoided or delayed. Under flat-fee billing, they happen when they should.
What Requires Separate Engagement
Capital markets transactions, registration statements, going-public transactions, Regulation A offerings, private placement memoranda, and other project-based work involve defined deliverables with variable complexity that are outside the scope of monthly flat-fee arrangements. These engagements are structured as separate fixed-fee projects with clear scope, deliverables, and timelines defined in the engagement letter. The fee for each project reflects the specific complexity of the transaction, the regulatory requirements involved, and the industry-specific disclosure challenges present.
Hourly vs. Flat Fee: An Educational Comparison
The hourly model compensates counsel for time spent regardless of outcome. The flat-fee model compensates counsel for being available, proactive, and effective at preventing problems. For issuers whose primary need is ongoing compliance counsel, the flat-fee model aligns incentives: the firm's interest is in maintaining a healthy, compliant client relationship, not in maximizing billable hours.
This is not a criticism of hourly billing in other practice areas. It is a recognition that in securities compliance, where the cost of a missed disclosure obligation can include SEC enforcement action, loss of trading market, personal liability for officers, and reputational damage, the marginal cost of counsel access should be zero. Flat-fee billing achieves this.
Frequently Asked Questions
What is a flat-fee securities attorney?
A flat-fee securities attorney provides securities law services for a fixed monthly or per-engagement fee rather than billing by the hour. This model allows companies to access counsel without the cost uncertainty of hourly billing, which in securities law encourages more proactive use of legal guidance.
What services are included in a flat-fee arrangement?
Typical flat-fee arrangements cover ongoing SEC reporting obligations, periodic report review, Form 8-K preparation, risk factor updates, board and officer consultation on disclosure questions, and routine compliance guidance. The specific scope is defined in the engagement letter.
What requires a separate engagement?
Capital markets transactions such as S-1 registration statements, Regulation A offerings, private placement memoranda, and going-public transactions typically require separate project-based fees because they involve defined deliverables with variable complexity.
Why does flat-fee billing matter in securities law?
In securities law, the value of counsel is highest before problems arise. Hourly billing creates a financial disincentive for companies to pick up the phone and ask questions. Flat-fee billing removes that disincentive, encouraging companies to seek guidance proactively rather than waiting until issues become enforcement matters.
How is the flat fee determined?
Flat fees are determined based on the scope of services, the company's reporting status, the complexity of its industry, and the volume of expected filings. The fee is discussed during the initial consultation and set forth in the engagement letter before work begins.
Questions about your specific situation?
Frederick M. Lehrer is a former SEC Enforcement Attorney with over 30 years of issuer-side securities law experience. All consultations are confidential. Flat-fee engagements.