Question: I always have a hard time talking about my fees with potential clients. Do you have any tips?
Paul Bonner: You’re not alone. Even the most seasoned lawyers can find fee discussions difficult. Translating the attorney-client relationship into dollars seems counter to the rapport that one works to build with a client. However, you need to remember clients hire lawyers not because they want a friend, but because they need a lawyer.
The best approach is to address fees directly. Be confident and have a straightforward discussion that ties back to defining the scope of your engagement. A few tips:
- Before your discussion, review your client’s needs and align your pricing strategy accordingly. Is an hourly rate or an alternative fee arrangement best? Is there a timing issue as to when your client can pay?
- During your discussion, walk your client through the scope of work and explain how the scope is tied to fees. If the scope is hard to define early on, that is OK. Address that fact and how it (and the associated cost) will be fleshed out as the engagement develops.
- During the engagement, promptly communicate any material changes in scope and the impact on fees. Provide accurate bills that detail the value delivered. Avoid general catch-all entries — clients view them negatively.
In sum, clients expect to pay for legal services; you are a skilled professional who brings value to the relationship; and a direct conversation about fees is the most professional and painless approach.
Paul Bonner, JD/MBA, has more than 10 years of experience at AmLaw 100 firms developing the strategic sales support function critical to assisting lawyers in becoming more effective in their business development efforts.
Stewart Hirsch: Clients expect lawyers to be assertive when helping them — so why dance around when it comes to talking about fees?
Believe in yourself. Acknowledge to yourself that you are good at what you do, and that your fees reflect the value of your work in the marketplace in which you are working. If they do not, you’ll find out soon enough.
Deal with it sooner rather than later. Transparency helps. Don’t hesitate early on in the conversation to discuss your fees with a prospective client. Waiting too long may appear as if you’re hiding something, and it certainly makes it more awkward. Try saying something like, “I’m delighted to talk more about this. Let me give you an idea of costs so we’re on the same page.”
Get personal. When you discuss fees, ask your potential client whether the fees are within the realm of expectation. By asking, you give the person a chance to share what he or she is thinking. If there are concerns, it is better to discover them up front rather than when waiting for payment. And showing you care what the potential client thinks goes a long way toward developing the relationship.
Stewart Hirsch is a business development and leadership coach for lawyers. He is also a former firm and in-house attorney. He is principal at Strategic Relationships, which he founded, and leads the coaching practice at Trusted Advisor Associates LLC. He also co-produces and edits “Ask the Authorities” for the LMA’s Strategies magazine. Follow him on Twitter @stewartmhirsch.
Stacy A. Smith: You are practicing law in the age of the cost-conscious consumer. Choosing to represent a client should always include a clear-cut conversation about fees up front. Since the conversation is mandatory, use an approach that acknowledges, accepts and uses the client’s cost-consciousness to your advantage.
Be the leader. Lead the conversation about fees — don’t wait until the client asks about your rates. Say, for example, “Let’s talk for a while about your case and then we’ll discuss my fees and options.”
Provide options. Before you start talking fees, know what options you’re willing to extend. If you would take your client’s case for $200 per hour and you estimate it will take 20 hours, would you also be willing to accept a flat fee of $4,000? Would you be willing to take the case on contingency and net a percentage of the recovery? Whatever the arrangement, know what your bottom line is before the conversation starts — it should be about options, not a negotiation.
Be precise about what your fee includes. If you accept a case on contingency, make sure your client knows what contingency means and what is and is not included. Will he or she be responsible for hard costs such as court filing fees, court reporter fees or expert fees? If so, when do you expect payment for the fees? On a flat-fee case, what is included? Everything? Discovery and trial? Appeal? The more specific you are, the better.
Be committed to cost management. Lastly, acknowledge your commitment to cost-management of the case. Communicate with your client about the case and fees throughout. If you are respectful of your client’s money, your client will be more agreeable to pay with ease.
Please check your state’s local rules of professional conduct about written fee arrangements and engagement letters, and when they are mandatory.
Stacy A. Smith is the firm administrator and director of marketing and client relations at Carter Conboy, a full-service law firm with offices in Albany and Saratoga Springs, NY.
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