Ever wonder what your clients are thinking? Here's one lawyer's experience as a client questioning a bill from a law firm:
The client and a colleague hired a law firm for some guidance on a business issue. A request was made by email to cap the fee at no more than X dollars (about 6 hours of time at the lawyer's hourly rate). The cap request was put in a written email, but no response was ever received to the request. There was no written retainer because there was already an existing relationship with the law firm.
The client received the bill, which was double the amount specified in the cap. In addition, the bill included a 2 hour phone call which appeared to be an error. The bill also reflected a 4 hour charge for some follow up which the lawyer suggested to the client. The client had responded, "Sure, go ahead and let us know what you think." However, when the lawyer went ahead with the work, he never said that the extra time would exceed the cap that the client requested. Moreover, from the client's perspective, the extra 4 hour task did not accomplish what was requested. In fact, when the client received the follow up, the client assumed that she hadn't been charged for it because it didn't look as if any work had been done on it.
The client went on to relate that the organization didn't have much money, and the extra money that was billed by the lawyer could have been used to hire one or two summer interns. Finally, in reviewing the bill, the client realized that an initial payment to the attorney had not been credited to the bill.
The client asks, "What is the best way to approach this attorney so as to elicit a positive response?" She goes on to say that if the attorney had told her at the time that the extra work would exceed the cap, she would have told the attorney not to go forward with the extra work. But then she second-guessed herself, saying that with the application of the original payment and the reduction for the 2 hour call that didn't occur, the work would fall within the cap, so perhaps she shouldn't discuss the bill with the attorney other than to ensure those two corrections - even though she still couldn't tell what work was performed to justify some of the charges.
As far as advice to the client goes, the client is entitled to know what services were received in exchange for your payment. If the attorney did some research on the client's behalf as a result of an issue or question that arose, the client is entitled to be told what steps were taken and what the outcome was. And the client is certainly entitled to question the attorney about the charges. And it goes without saying that it would have been better for the client had the client gotten a written fee agreement (yes, I did say that this particular client was also an attorney - everyone makes mistakes).
But since my real focus is helping attorneys become more effective and more profitable, I'd like to focus back on the lawyer in this story. I think this is a great lesson for attorneys about what it feels like to be on the other side of the table. Clients want to know what they're paying for and what the result is. Many clients will have the same kind of agonizing second guessing that this client did - about both your bill and your services. While both may be clear to you, if they aren't clear to your clients, you're setting yourself up for trouble.
If you were in the attorney's position, would you want your client to feel the way this client did? Would a client that feels the way this client did be a 'raving fan' of your services? Would they wholeheartedly refer you to someone else? Wouldn't it be much better for the attorney if the client didn't feel that way? Wouldn't it be better if the client were comfortable with *both* the fee paid *and* the services that were provided in exchange for the fee? Both the attorney and the client should feel like they're getting a good deal, or the relationship isn't what it could be.
Some of the mistakes, such as the failure to apply the previous payment and the incorrect charge for the telephone call, may seem 'minor' to some. But these oversights call into question the attorney's bookkeeping and record keeping. If the attorney isn't keeping track of the payments the clients are making or ensuring that the clients are being charged correctly, what other things is the attorney forgetting or overlooking? (And in the context of an engagement totaling only approximately 6 hours, a 2 hour phone call would not only be memorable, but should have raised some questions upon review of the bill.) In short this kind of "mistake," kills trust and credibility with the client.
Here a few things the attorney could have done a lot better:
1. Made sure that the fee agreement was crystal clear to both sides;
2. Discussed the scope of the work to be performed for that fee;
3. Gotten both of the above in writing;
4. Specifically confirmed with the client the additional work that was going to be performed, and estimated the fee that would be charged for that work, getting agreement from the client if that fee were to exceed the 'cap' (if the cap was part of the original agreement) -- and put it in writing;
5. Had a system that was reliable and kept track of client payments;
6. Itemized the bill to ensure the client understood the services rendered;
7. Provided the client with the work product that was generated (at least a letter describing the outcome of the additional work);
8. Reviewed the bill for accuracy before sending it out.
Failing to do any one of these things is damaging to the attorney's relationship with the client. The combination is likely to be deadly.
I have been on the receiving end of legal bills, from attorneys highly recommended to me. On my NO list: billing for time to prepare the bill, billing for time calling me and leaving a voicemail to call me back, billing attorney rates for everything that I personally know was done by a paralegal.
In short, I was disgusted. Needless to say, my relationship with said lawyers was extremely short.
Posted by: brandyk | March 21, 2007 at 08:52 PM