Your fee structure determines your cash flow, client relationships, and the types of cases you take. Each model has advantages and disadvantages depending on your market, practice size, and risk tolerance.
Contingency Fee Model
The contingency model is the most common in property tax consulting. You charge a percentage of the first year's tax savings — typically 25–40% for residential and 30–50% for commercial. You only get paid if you win a reduction.
| Aspect | Contingency Model |
|---|---|
| Typical rate | 25–40% residential; 30–50% commercial |
| When paid | After reduction is achieved |
| Client risk | Zero — no savings, no fee |
| Consultant risk | High — you bear all costs if no reduction |
| Best for | High-volume residential; large commercial cases |
Flat Fee Model
The flat fee model charges a fixed amount per service — filing, informal hearing, formal hearing — regardless of outcome. This provides predictable revenue but may be harder to sell to clients who are uncertain about their chances of success.
Hybrid Model
The hybrid model combines a flat fee for services rendered with a contingency fee for savings achieved. For example: $150 flat fee to file and attend the informal hearing + 25% of savings above a threshold. This model aligns incentives while providing some base revenue.
Recommended Fee Structure by Practice Type
| Practice Type | Recommended Model | Typical Revenue per Case |
|---|---|---|
| High-volume residential (100+ cases/yr) | Contingency 30% | $300–$800 per case |
| Boutique residential (25–50 cases/yr) | Hybrid: $150 flat + 25% contingency | $400–$1,200 per case |
| Commercial specialist | Contingency 35–50% | $2,000–$50,000+ per case |
| Multi-state firm | Contingency 25–35% | Varies by state and property type |
Whatever fee structure you use, put it in writing. A signed engagement letter protects both you and your client and reduces disputes over fees when a case settles.