In one of my first posts I noted at the end that I would post again on the subject of negotiating attorney fees and other aspects of picking an attorney. Well, this is actually something that I will probably post about several times because I am pretty passionate about this, but here’s a first stab at it.
The typical conversation potential clients have with their potential attorneys starts with a discussion about what they want the attorney to do for them. But somewhere in the first 1/2 to 1 hour, the discussion will inevitably find its way to the lawyer’s fees. This is because it is an important topic for all involved: the lawyer wants to make sure s/he gets paid, and the client wants to make sure s/he can afford what the attorney is asking (or hopefully negotiate it down if it starts too high).
So the client might say something like, “how much is this gonna cost me?” And the lawyer comes back with a “Well . . . I can’t give you a firm number, but I charge $300/hr, and I think it might take me about 10-15 hours to complete the work.”
** PAUSE** Let me translate this last statement from the perspective of the client: “Well . . . I won’t give you a firm number because I don’t want to accept any risk that it might take me too long and I expect you to take all the risk, but I charge at least 15 times more per hour than you make and I hope it will take me at least 15 hours to complete the work, but I think I will be able to get away with charging you for a little more cuz you wont know any better.”
Whenever I speak with people about why they choose alternate routes to hiring an attorney to accomplish certain legal tasks, price is usually one of the first words out of their mouth. And the above example is exactly why. There is such a huge disconnect between a lot of attorneys operating under the traditional billable hour model and their clients. Attorneys claim they are the experts, yet they aren’t confident enough in their knowledge of the work to even take a gamble on how much they should charge up front based on time,
difficulty, expertise, value to the customer actually, just time, because that is all most attorneys consider when quoting a price. They, the experts, expect the clients to take on the entire financial risk that comes with no up-front price and an uncertain potential for an outrageous number of billable hours.
How can a small business, already on a tight budget, imagine that they can afford legal assistance if they don’t even know how much that assistance will cost?
Now imagine this conversation: “So how much is this gonna cost me?” “Well, based on the scope of work that I will be performing, the other benefits I am offering such as unlimited calls to my office at no additional charge, and on the value that we have agreed these services will bring to your company, it will cost $______ for option A, $_____ for option B, or $______ for option C (each option containing more or less value for the client and having a corresponding price point). Feel free to think about it and get back to me in a day or two.”
Wow, what a difference, eh? They have actually talked about and agreed on the value that the services bring to the client’s company, rather than how much time it will take the attorney. There is a fixed fee quoted up front, WITH DIFFERENT OPTIONS! There are services being provided that are tailored to the individual client’s needs, and the fee reflects that – it’s not a one-size-fits-all packaged deal like other fixed-fee arrangements. How refreshing.
Based on his/her answer, it is also safe to assume that the attorney didn’t cut the potential client off at 1/2 hour leaving the attorney to make assumptions about what the client needs so s/he wouldn’t waste his/her valuable billable time with an advertised “free initial consultation” designed to get suckers in the door. It assumes s/he actually took the time to listen to and get to know the client’s business so that s/he could understand the value that the services could bring to the client! It might even be safe to assume that this conversation didn’t happen all at once, but maybe over two meetings so the attorney could research, or even visit (wouldn’t that be amazing!), the client’s business in between the meetings to better understand the client’s needs.
Now, if a small businessman or woman could meet with an attorney and not be scared about the unknown price, but be confident that there would be an upfront fee, not to be exceeded as long as the scope of work doesn’t change, that would allow them to plan, budget, and prepare for legal costs, would that change how often small businesses consulted an attorney? That would allow them to be comfortable discussing the matter with their attorney while the work is being done, to stay up to date on the progress, ask questions, and get more related advice, without being worried about being charged 0.3 hours (aka $90 in our example above) minimum for every call even it’s just 2 minutes.
Now, I am not saying that pricing based on value to the client will always be cheaper for the client. While it may be less expensive, it may also end up costing about as much or maybe even a little more in some cases. Usually the several options quoted by the attorney will reflect these different relative price points. The difference is, no one is worried about time, so the attorney can spend more time on you, getting to know you, and thus offer more value so you get more bang for your buck. And that’s what’s important right? If you are the type who is willing to pay a premium for premium value, you might choose the more expensive option that provides the maximum value. If not, you might choose the least expensive option that provides less value. Most people will be in the middle, but the point is that the client can choose.
And if small businesses could get an upfront cost, they could say, “I can’t afford this today, but now I will be able to budget so that in two months I can come back.” And they can come back worry free. Or the attorney can set up a payment plan today. The point is that the client has no financial risk from the fees anymore, and can plan for regular expenses, rather than pray for non-crippling legal fees.
So, if you’re wondering how to choose your attorney, find one that treats you like this. And if they won’t, find another attorney who will.