To Charge or Not To Charge: The Lawyer As Consultant

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Published on 1/17/11

Most law firms, whether large or small, begin a new client engagement with a consulting process: a stated period of time, such as an hour, that a potential client spends with an attorney to discuss the matter at hand and explore whether to establish a client relationship.

The consulting process is essentially a business development effort meant to convert prospects into clients. It is marketing in its purest and most immediate sense; at the end of the hour, the lawyer either does or does not have a new client.

That can be termed the "conversion process," and there is no real standard for conversion rates. It largely depends on the nature of the matter and the experience of the lawyer. Presumably, the more experienced the lawyer doing the consulting, the higher the "conversion" ratio.

One important factor that impacts the conversion process is whether to charge a prospective client a fee for the initial consultation. The wisdom of charging in this situation has long been debated.

There are three fundamental choices: free initial consultation; paid initial consultation at the lawyer's regular rate, exclusive of any subsequent engagement; or paid initial consultation at the lawyer's regular rate, with the payment applied to the total bill if the consultation results in an engagement.

Obviously, a potential client would find it attractive to get something for nothing. The lawyer would counter about the value of a free consultation, "You get what you pay for," and clients may well be inclined to agree. Many have attended "free" consultations on time-shares or investment products, only to find out that they end up paying far more in the long run.

The issue is not that much different from the ongoing debate over 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. The fact that the client owns his own file does not prohibit the lawyer from contracting to copy it at the client's expense. But be aware that your competitors may not charge for such services, and clients can resent being "nickel and dimed."

Whether you can charge for the initial consultation 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, the third option mentioned above — a charge that can be applied toward the total fee — might be the most practical approach.

Ultimately, the issues involved are trust and value. 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 charge.

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