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To Charge Or Not To Charge

by Ed Poll

Published on 8/31/09

Believe it or not, some lawyers are getting new business from new clients, and when they do, they may face an issue that, if not handled properly, could stop new business before it starts.

The issue: whether to charge a prospective client a fee for an initial consultation, the meeting before being engaged. The wisdom of charging in this situation has long been debated, and it comes down to three fundamental choices:

  • Free initial consultation
  • Paid initial consultation at the lawyer's regular rate, exclusive of any subsequent engagement
  • Paid initial consultation at the lawyer's regular rate, with the payment applied to the total bill if the consultation results in an engagement.

There is no one right answer. Obviously, a potential client would find it attractive to get something for nothing. The lawyer would counter, regarding the value of a free consultation, "You get what you pay for" — and clients may well be inclined to agree. Too many have experienced "free" consultations on timeshares or investment products, only to find out that they ended up paying far more in the long run.

The issue is part of the ongoing debate about ancillary charges. Some lawyers charge their clients for "opening" a file on each matter; others charge for photocopying the file before giving it to the client when requested. On balance, these are legitimate charges to clients if specified in the retainer agreement.

Another example is charging to file a notice of unavailability or a notice of continuance before an extended absence from the office. This is often in the client's best interest and can be considered billable, in part because failure to file such notices creates risk for the client.

If opposing counsel does not know you will be on vacation and files a motion or other action requiring a special appearance or a later motion of continuance, the client will ultimately pay more than the original time needed for a simple notice.

Whether you can charge for the initial consultation, or any ancillary fee, ultimately becomes a question of the client's trust and confidence in you and how long it takes to generate those feelings.

Given the need to attract clients in today's economic conditions, a charge that can be applied toward the total fee might be the most practical approach.

Of course, if your competitors do not make such charges, or if your client resents being "nickel and dimed" for them, it's your call whether or not to charge. In the final analysis, separate charges should not be viewed as profit items, but rather as part of the total fee structure.

As lawyers help people's lives improve, our objective should be to provide and account for our services in such a way that clients understand and accept the value as well as the cost of what we do. When that happens, fees are not an issue — and lawyers do not have to apologize for what they bill.

Even if you decide against charging for a particular action, at least show the time spent, the charge and a courtesy discount. It may educate your client and strengthen your relationship.

Copyright 2011. Edward Poll. All rights reserved. Reprinted with permission from Edward Poll.

About The Author

Ed Poll, principal of LawBiz Management Company, is a nationally recognized coach, law firm management consultant, and author who has coached and consulted with lawyers and law firms in strategic planning, profitability analysis, and practice development. Mr. Poll has practiced law on all sides of the table for 25 years-- as a corporate general counsel, government prosecutor, sole practitioner, partner, and law firm chief operating officer and been a consultant to small and large law firms for 20 years.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.