I don't think there is a true physical way to completely avoid any interior space being taken up with the handle. There was one soft side bag that had the handle pushed all the way out to the edges, but then that meant you couldn't carry anything on top. So, in my search anyways, I ended up looking for what took up the least amount of space, and if you needed absolutely flat, use a thin piece of plastic board to lay over it.

I use the carry-on size, but look at the Aleon line. Not cheap, not lightweight, but they seem to give you the best amount of interior space. The handle sits flat against the bottom and the corners are pretty sharp, so you gain a little extra room there.