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Fee or Free

 

A client of mine asked me whether he should charge a prospective client a fee for their initial consultation, the meeting before being engaged.

There are three approaches to this issue, long debated amongst lawyers:

1.                   Free initial consultation

2.                   Paid initial consultation

3.                   Paid initial consultation with the payment applied to the total bill if they engage you.

There is no one right answer or magic bullet in response to this question. Obviously, everyone wants to get something for nothing. But, we then also run into the bromide that "you get what you paid for."  In this case, nothing.

Whether you can charge for the initial consultation is normally a question of the client’s trust in you, their confidence in you … and how long it takes to generate those feelings in the client toward you …

I don’t think “free” connotes expertise … and that’s what prospective clients are looking for. In deference to the current economy, and the need attract clients, you might consider alternative #3 …  charge them an initial consultation fee, and apply that amount toward the total fee in the event they should retain you.

This is never an easy choice. But, we must remember that people do believe they get what they pay for … and anything free is usually viewed with suspicion either as to motive or expertise. A discount in an on-going relationship, however, is viewed differently and not to be confused with the issue at hand.

 


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Do you know when you’ve succeeded?

The other day, I was cycling up Red Rock Canyon in Las Vegas, NV.

I went from about 2500 feet to 4713 feet. En route, the road was rolling hills. So, sometimes I went down, but then there was an ascent next … all the way to the top, about 7.75 miles from the start.

Before I reached the top, however, I was complaining to myself about how hard this ride was … and whether I could complete the ride as I had intended. When I reached the final plateau, not having ever ridden there before, I was not sure that was the top. I thought there were more rolling hills ahead of me. I asked a couple of cyclists who were descending. When they told me this was the top, I was elated I had made it to the top, relieved that the pain of the trek was over and quite surprised at how hard I had fought with myself.

How many of our clients don’t realize or appreciate the success we bring to the table for them? What have you done to educate them about the process of your representation? I was fighting myself because I had never been in Red Rock Canyon before. Most of your clients have never been involved in the judicial process before. And even sophisticated clients with previous involvement don’t truly appreciate what lies ahead. What have you done to show them a preview of what’s to come? What have you done to make their journey easier? What have you done to shine a flashlight on the road in front of them?

When you shine the flashlight, and they still agree to move forward, the likelihood is that they will pay you your full fee without question and promptly in accordance with your engagement agreement.

Use the flashlight!


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Can you afford to retire?

While the economic crisis is being felt by nearly every segment of the working population, one group of workers is faced with particularly tough decisions regarding their futures. Law firms need to be prepared to assist them in making a transition during challenging times. Six-in-ten workers (60 percent) over the age of 60 say they are putting off their retirement due to the impact of the U.S. financial crisis on their long-term savings, according to a survey by CareerBuilder.

I agree with Ron Friedmann that lawyers, even partners in larger firms, are feeling the economic strains of today’s world and therefore delaying anticipated retirement. But one group of lawyers may not:  Sole and Small Firm lawyers. These folks have something of value that they can sell .. converting their equity into cash. Most lawyers never thought their law practice was a saleable asset. So, while their investments may have tanked, they can look to their law practice for ready cash.


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Why sell your law practice?

Lawyers, ready to retire, must consider the value of their law practice as an asset that can be sold … With 401 Ks becoming 101 Ks (or less), the revenue from the sale of one’s law practice may provide the revenue stream needed for retirement.


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Are lawyers agents?

Seth Godin suggests an interesting question:

"Travel agents… gone.
Stock brokers… gone.
Real estate brokers… in trouble. Photographer’s agents, too.
Literary agents?

The problem with being a helpful, efficient but largely anonymous middleman is pretty obvious. Someone can come along who is cheaper, faster and more efficient. And that someone might be the customer aided by a computer."

We’ve seen this happen in the legal community. Many more people are representing themselves, pro se, because they can’t afford lawyers or … heaven help us … they can serve their own interests just as well as the lawyer.

Lawyers must bring creativity, judgment and experience to the table to maintain their position in the affiars of business. Being a commodity, or being "run of the mill," just isn’t enough anymore. And a major differentiating factor for most clients is the "care and feeding" offered by lawyers. Impersonal and expensive (a relative term) is no longer accepted. We’ve got to move past the point where the single largest complaint against lawyers is their failure to return phone calls, the failure to respond quickly to the concerns, wants and needs of the client. Until that happens, the legal profession is in jeopardy of losing its franchise.


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Change creates opportunity

One could view the current situation with the attitude that whenever there is challenge (a much over-used word today), there is also opportunity. Certainly better to consider opportunities than feeling like a victim in constant pain.

Our new newsletter is now on the stands.


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