Think You Want to Raise Fees?: Think Again

LawBiz® TIPS – Week of December 29, 2015

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Look to yourself and family first and the business will take care of itself as you cherish the last few days of 2015.

Lawyers will want to—and should—raise their fees at various times throughout their careers. However, the time is not always right for raising fees, and it is important to know when NOT to raise fees.

Client Says No

If the client resists a fee increase, and either the client or the matter being handled is important to you, think seriously about balancing your economic interests with your personal desire. If, after conscious deliberation, you want to continue the work with this client, first seek to obtain an agreement to a fee increase at a certain date in the future.

Client Under the Gun

What if you are on the eve of trial or in the midst of a sensitive negotiation? Never use the sensitivity of time to raise fees. Your client will see it as attempted extortion and will accept it, if at all, only with great hostility. And that will lead inevitably to bad-mouthing.

Acceptance of Retainer

If you have already agreed to a retainer, you should not raise fees. Most retainers are intended to cover the entire cost of the matter or to be a monthly retainer to cover services without reference to hours worked. In these circumstances, clients will be annoyed if you say you cannot work more this month because the hours already worked exceed your original estimate. That is the nature of a retainer: it is intended to be a fixed sum. You keep the difference when you work less than you estimated, and the client benefits when you work more than you estimated. Clients will be miffed if you seek to modify the arrangement in midstream. If the work continues to be out of balance with the retainer for an extended time, raise the issue with your client before increasing the retainer.

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Think You Want to Raise Fees?: Think Again

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American Bar Association

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