Legal Fees

My Journey To the Land of Setting Expectations

Back in the good old days, I used to bill by the hour, just like every other lawyer. I had a simple retainer agreement with my clients which essentially provided that they agreed to pay my hourly rate for all of the hours that I spent on their matters.

When the work was done, I would send my bill to the client calculated by multiplying the time spent by my hourly rate. Then my client would pay the bill. Life was simple.

Eventually some clients started asking for estimates. I did not like that because once I had given an estimate, I would have to answer stupid client questions such as, “why is your bill double the estimate?”  It all seemed to be quite pointless to me. We had a contract. I put in the hours and they were supposed to pay for them. Why were they now questioning things?                    

At that time, I preferred the clients who did not ask for estimates, because I expected them to simply respect the contract that I had foisted upon them and pay my bill for all of the time that I had spent.

As things evolved, I began to understand that if I did not provide the client with an estimate, the client would invent one in their minds (without necessarily having any  knowledge or experience to back it up), and it was rarely as high as my hourly rate multiplied by  the number of hours which I had recorded. Arguments would ensue. The number of times that I both won the argument and retained the client was not particularly high.

After an embarrassingly long time, I eventually figured out that it was in my best interest to provide an estimate whether or not the client had requested one, and to communicate effectively with the client when things arose which might affect my ability to complete the job within the original estimate.

I recently spoke to a young lawyer who made all of the same mistakes which I used to make. They quoted their hourly rate, put in the work, and sent the bill, only to have the client say that their expectation was that the bill would be much less. It was a rookie mistake.

My advice to the young lawyer? “Call the client. (Do not email them. Do not text them.) You made the mistake when you did not discuss an estimate upfront. Own it. There is no universe in which you are going to both win the argument and retain the client. In fact, it is unlikely that you are going to be able to do either of those things if you do not handle this well. Don’t argue about the amount of time spent, although it is okay to explain why certain things were done if the client questions them. Ask the client how much they are comfortable paying for the work that was done and accept whatever they offer. Do better next time.”

Postscript: To those who  believe with all of their heart and soul that the solution to every problem concerning billing for legal services lies in charging fixed fees, that is not what this post was about!

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